U.S. Considers Severe Trade Restrictions on China: Impact on Tokyo Electron and ASML Holding

The U.S. is contemplating the use of the Foreign Direct Product Rule to impose severe trade restrictions on China, pressuring allies like Tokyo Electron and ASML Holding to cease providing advanced semiconductor technology to the country. This move aims to limit China's access to American technology.

The United States is considering imposing the most severe trade restrictions on China if companies continue providing advanced semiconductor technology to the country, Bloomberg News reported on Tuesday.

These measures are targeted at firms like Tokyo Electron and ASML Holding NV, according to sources. The U.S. may enforce the foreign direct product rule (FDPR), a provision that can restrict the sale of products made with American technology, even if they are produced abroad.

Originally introduced in 1959, FDPR allows the U.S. government to regulate foreign-made products that use American technology. The U.S. is currently discussing this strategy with officials in Tokyo and The Hague to tighten restrictions on China. Both ASML and Tokyo Electron have declined to comment on the geopolitical discussions, as reported by Bloomberg.

(With inputs from agencies.)