US-China Conflict Intensifies...? White House Says "No Grounds for Sanctions on Micron by China"

On the 24th (local time), the White House dismissed as baseless the sanctions imposed by the Chinese government on the U.S. semiconductor company Micron. It also stated that it would stand with allies, including the Group of Seven (G7), to counter China's economic coercion.

U.S. President Joe Biden (right) and Chinese President Xi Jinping shake hands at the first face-to-face summit between the U.S. and China held in Bali, Indonesia, last November. [Image source=Yonhap News]

According to the White House, John Kirby, Coordinator for Strategic Communications at the National Security Council (NSC), said during a phone briefing that day, "China's announcement regarding Micron is baseless." Kirby noted that these sanctions came the day after President Joe Biden and G7 leaders issued a joint statement addressing China's economic coercion, asserting, "It is clear that this is an attempt to undermine the strong stance taken by the G7 against China's economic coercion."

Earlier, G7 leaders issued a joint statement targeting China across security, economic, and human rights issues at their summit held in Hiroshima, Japan. The statement emphasized peace and stability in the Taiwan Strait and included cooperation measures to reduce dependence on China in critical supply chains. In response, the Chinese government strongly opposed the statement and, on the closing day of the G7 summit on the 21st, announced it would halt purchases of Micron products citing security concerns.

Kirby questioned, "How does China respond to criticism of economic coercion?" and answered, "With economic coercion." He criticized, "These measures targeting and attacking U.S. companies do not align with China's claims of having an open market and a transparent regulatory system." He added, "We will continue close cooperation with our allies and partners within the G7 and persistently oppose coercive economic practices."

China, interpreting the G7 joint statement as a consolidation of U.S. allies against it, appears to be strengthening cooperation with Russia. The New York Times (NYT) analyzed, "The closeness between China and Russia is deepening," and noted, "One of the key themes of the G7 summit was China's rise and the Western response to it, which China inevitably perceives as the U.S. rallying its allies against it."

Recently, Russian Prime Minister Mikhail Mishustin's visit to China exemplifies the economic ties between the two countries. During a meeting with Mishustin, Chinese President Xi Jinping emphasized his desire to elevate the level of cooperation with Russia. Mishustin also attended the China-Russia Business Forum the previous day, describing China as an "important friend." At the forum, Mishustin announced that trade between the two countries is expected to surpass the 2024 target of $200 billion this year.

Concerns are mounting that U.S.-China tensions could intensify further. Nouriel Roubini, a New York University professor known on Wall Street as "Dr. Doom," warned that the U.S. and China are heading toward confrontation following the G7 summit. In an interview with Bloomberg TV, he said, "China's response to the G7 summit shows that Europe, the U.S., and Japan are uniting against China," and predicted, "There will be no thaw between the U.S. and China." He further forecasted that this situation would slow economic growth, raise commodity prices, and ultimately have ripple effects on the markets.

However, Kirby also emphasized that communication channels with China remain open. He stressed that China's sanctions on Micron will not undermine broader efforts to improve U.S.-China relations. Earlier, after the G7 summit, President Biden stated at a press conference that the cooled U.S.-China relationship following the reconnaissance balloon shootdown incident earlier this year would soon "thaw." The Wall Street Journal (WSJ) reported that despite China's sanctions on Micron, on the 25th, U.S. Commerce Secretary Gina Raimondo and Chinese Commerce Minister Wang Wentao are scheduled to hold a dinner meeting.