Previously, reports suggested the US Department of Defense was considering adding Semiconductor Manufacturing International Corporation (SMIC) to an Entity List along with Huawei, ZTE and more than 70 Chinese tech firms, barred from doing business with US firms without a licence, as part of the ongoing trade war between Washington and Beijing.
The United States Department of Commerce has reportedly sanctioned China’s biggest chipmaker, Semiconductor Manufacturing International Corporation (SMIC), curbing exports from the company, according to a letter cited by the Wall Street Journal (WSJ) on Saturday.
According to the Commerce Department’s dispatch to the Shanghai-based firm, the WSJ reports, US companies will now need a licence to export certain products to China’s largest chipmaker, because of the “unacceptable risk” that SMIC products could be used for military purposes.
An SMIC spokeswoman cited by the WSJ said in an emailed statement that the firm had not yet received an official notice of the sanctions and was looking into the situation.
The chipmaker reiterated that it has no relationship with the Chinese armed forces and does not manufacture goods for any military end-users or uses.
There has not been any official comment on the report from the US Commerce Department.
Escalated US Attack
Earlier reports in September suggested the Trump administration was considering adding the firm to a government Entity List along with Huawei, ZTE and more than 70 Chinese tech firms which are barred from conducting business with US firms.
Adding SMIC to the Commerce Department’s so-called entity list would in effect target exports from a broader set of companies.
“The military end-use rules only apply to a subset of listed US origin items. The Entity List rules apply to all US origin and some foreign-origin items,” said Kevin Wolf, an export control lawyer at Akin Gump and senior Commerce Department official in the Obama administration, as cited by Bloomberg.
Around 50 per cent of SMIC’s equipment originates from the US, with the company having a market value of more than $29 billion, according to Bloomberg data, with US chipmakers Qualcomm Inc. and Broadcom Inc. among SMIC’s customers.
“Should the US export ban on SMIC materialise, it will signal an escalated attack by the US on China’s semiconductor industry and more Chinese companies will likely be included,” analyst Edison Lee of the American multinational independent investment bank and financial services company Jefferies said.
In the wake of the above-mentioned reports, the Chinese semiconductor company reiterated that it strictly abides by the laws and regulations of relevant nations while having maintained cooperative relations with global chipmaking equipment suppliers for years.
“Any assumptions of the company’s ties with the Chinese military are untrue statements and false accusations. The Company is in complete shock and perplexity at the news. Nevertheless, SMIC is open to sincere and transparent communication with the US Government agencies in hope of resolving potential misunderstandings,” SMIC said in a statement on its website.
Chinese Foreign Ministry spokesman Zhao Lijian slammed Washington over “blatant bullying.”
“What it has done is violated international trade rules, undermined global industrial supply and value chains and will inevitably hurt US national interests and its own image,” Zhao told a news briefing in Beijing.
China’s Tech Giants in the Crosshairs
The US Department of Commerce added dozens of internationally based Huawei affiliates to its Entity list in August 2020, restricting their ability to do business with American firms. The decision expanded on rules issued in May subjecting companies to enhanced licensing requirements if they sold third-party computer chips or chip designs to Huawei that rely on US software or manufacturing equipment.
Back in 2019 the department essentially banned US companies from selling parts and components to 68 Huawei affiliates, allowing, however, for temporary waivers that enabled limited transactions to ease the transition for American suppliers.
Those waivers expired in August 2020, with a fresh order subjecting an additional 38 Huawei affiliates around the world to similar restrictions.
Fresh measures on the part of Washington could block Huawei from gaining access to chipsets, in yet another stinging blow to the Shenzhen-based tech giant.
REUTERS / Dado Ruvic
Earlier this month China had launched plans to boost the mainland chipmaker and others, seeking to distance itself from US technologies.
Sanctions targeting the Chinese partially state-owned publicly-listed semiconductor foundry company, SMIC, would come as yet another step in the escalating tensions between the US and China, that have been exchanging invective on issues ranging from trade, their respective governments’ handling of the coronavirus pandemic, and perceived threats to intellectual property and national security.
The Trump administration began its onslaught by blacklisting Huawei Technologies Co., preventing the giant Chinese telecommunications provider from buying components from American suppliers and pressuring allies to follow suit.
REUTERS / Florence Lo/Illustration
Subsequently, President Donald Trump threatened to ban the video app TikTok from China’s ByteDance Ltd. if the service weren’t sold to American owners, sparking indignation among Chinese executives and government officials, who have repeatedly dismissed all allegations of spying and presenting a security threat.
U.S. government approves alliance between WestJet and Delta, with conditions – CP24 Toronto's Breaking News
WASHINGTON, Wash. – The U.S. Department of Transportation has granted tentative approval of an alliance agreement between WestJet Airlines and Delta Air Lines.
The airlines intend to co-ordinate services, including network planning, pricing, and sales activities.
Capacity is expected to be expanded on some existing routes while some services will be introduced on new routes that will increase travel options to and from Canada.
One condition of approval is the removal of WestJet discount carrier Swoop from the alliance and the selling of 16 slots at New York’s LaGuardia Airport.
Canada’s Competition Bureau approved the joint venture in the summer of 2019.
The airline industry has struggled amid a massive drop in traffic following the COVID-19 pandemic.
This report by The Canadian Press was first published Oct. 23, 2020
BlackburnNews.com – Canadian retailer to shutter operations – BlackburnNews.com
Canadian retailer to shutter operations
October 23, 2020 6:35pm
A popular women’s fashion chain is the latest Canadian retailer to fall victim to the slumping economy caused by the COVID-19 pandemic.
Le Château Inc., which is based in Montreal, announced Friday that it had filed a Companies’ Creditors Arrangement Act (CCHA) application to protect its assets, while it liquidates and winds down operations, according to a media release posted on the company’s corporate website.
The chain has 123 stores across Canada, including one at Devonshire Mall in Windsor and one at White Oaks mall in London. The company also maintains a website that serves customers in both Canada and the U.S.
In its release, the company said every effort was made to keep the company afloat.
“The retail industry faced numerous challenges due to the ongoing COVID-19 pandemic and the second wave currently hitting our communities across Canada,” the company said. “Its already evident impact on consumer demand for Le Château’s holiday party and occasion wear, which represents the core of our offering, has diminished Le Château’s ability to pursue its activities.”
There were 900 people employed in the chain’s stores, plus 500 at the head office in Montreal.
“We regret the impact this will have on our people and can assure you that we explored all options available to us prior to taking this difficult decision,” the company said. “We also thank the fashion schools and the business partners that have been part of our legacy and wish them continued success in keeping Montréal the fashion centre of Canada. Most importantly, we thank the millions of Canadians whom we have had the privilege of serving over the past six decades.”
There is no word on when the stores will close.
Alberta to stop limits on oil production in December after nearly two years – Business News – Castanet.net
Alberta’s oil curtailment quotas are set to end in December, nearly two years after the previous NDP government introduced them to support oil prices, the UCP government announced Friday.
The curtailments, reset monthly, are no longer necessary because 16 per cent of Alberta’s crude oil production is off-line, down from 22 per cent at the start of the COVID-19 pandemic, the government said in a news release.
It added it will retain the regulatory authority to reintroduce the measures if necessary in 2021.
“Maintaining the stability and predictability of Alberta’s resource sector is vital for investor confidence as we navigate the economic conditions brought on by the pandemic, the commodity price crisis and the need for pipelines,” said Energy Minister Sonya Savage.
“This purposeful approach serves as an insurance policy, as it will allow Alberta to respond swiftly if there is a risk of storage reaching maximum capacity while enabling industry to produce as the free market intended.”
The province quoted Genscape in noting that there were about 20 million barrels of oil in storage as of Oct. 16, down from nearly 40 million when the curtailment program began.
High inventory levels are blamed on the inability of the pipeline system to match the province’s growing oil production levels, mainly from new and expanded oilsands projects.
The program has been controversial from the start, with oil producers such as Cenovus Energy Inc. largely in favour of it while oil producers that also own refining operations, such as Imperial Oil Ltd., adamantly opposed.
“We have always maintained that a market-based approach is best and support the government’s move to end the current program,” said Husky Energy Inc. spokeswoman Dawn Delaney on Friday.
In a report, RBC analyst Greg Pardy said the end of the program is beneficial for producers including Cenovus, Suncor Energy Inc., Canadian Natural Resources Ltd. and others that have been forced to choke back production at their facilities.
Suncor, for example, has not been able to maintain full production at its Fort Hills oilsands mine after expanding its capacity to 194,000 barrels per day in 2018. Earlier this year, it shut down one of its two extraction trains because of low oil prices.
However, a rebound in production could result in widening of the price discount on western Canadian crude versus U.S. benchmarks, Pardy warned, noting that lower oilsands output so far this year has reduced the discount on western Canadian Select bitumen-blend oil.
The province’s allowable production quota was gradually raised from 3.56 million barrels per day in January 2019 to 3.81 million bpd by year-end, a level maintained through the first 11 months of 2020.
The province says production was actually 3.1 million bpd in August and it’s not expected to exceed export capacity before mid-2021.
The government’s move to stop the program makes sense given the impact of the COVID-19 pandemic on the oil market, said Ben Brunnen, vice-president of fiscal and economic policy for the Canadian Association of Petroleum Producers.
“This enables companies now to be making decisions from a production perspective based on market fundamentals as opposed to government-mandated limitations,” he said.
But he added it’s unfortunate the government felt obliged to intervene in the market in the first place.
“CAPP supports transparent and unconstrained market access to ensure all of Alberta’s oil production is delivered to desired markets at market clearing prices,” he said.
The government says it extended what was intended to be a short-term measure because of ongoing delays to pipeline projects that would increase the province’s export capacity.
Pardy said the completion of pipelines including Keystone XL, the Trans Mountain expansion, and Enbridge Line 3 “should enhance the province’s permanent ability to balance production and takeaway capacity, helping to ensure Alberta’s resources are exported at full value.”
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