US contemplates stricter trade regulations in response to China’s chip crackdown

According to Bloomberg News –

July 16 (Reuters) – As a result of opposition to its chip crackdown on China, the United States has informed its allies that, should corporations continue to grant the nation access to cutting-edge semiconductor technology, it may employ the strictest trade restrictions at its disposal, Bloomberg News reported on Tuesday.
According to the newspaper, which cited persons involved with the discussions, these measures would be applied to businesses like Tokyo Electron (8035.T), opens new tab, and ASML Holding NV (ASML.AS), opens new tab.

According to the article, the United States is considering enforcing a regulation known as the Foreign Direct Product Rule, or FDPR.
In order to regulate the trading of American technologies, the Foreign Direct Product Rule, or FDPR, was originally enacted in 1959.
It basically states that the U.S. government has the authority to prevent the sale of any product manufactured with American technology, even if it was made abroad.

According to the Bloomberg story, the United States is putting the notion in front of authorities in Tokyo and The Hague as a possible consequence if the two nations don’t increase their own sanctions against China.
According to Bloomberg, ASML declined to comment on the talks, and Electron stated that it was unable to comment on “geopolitical issues”.
When Reuters reached out for comment, Tokyo Electron, ASML Holding, and the US Department of Commerce did not immediately reply.