SMIC had been taking advantage of a regulatory loophole to buy U.S. technology, but the Defense Department has introduced a proposal to block exports, Reuters reported Friday morning.

Meanwhile, some Commerce Department officials are trying to stop the Defense Department's proposal.

SMIC was added to a U.S. blacklist last year, the report says. As a result it is supposed to be denied "access to advanced manufacturing equipment from U.S. suppliers". The blacklisting is due to potential ties between SMIC and the Chinese military.

Recall, last month China accused the U.S. of "stretching the concept of national security" by preventing Intel's plans for expansion in the country.

Chinese Foreign Ministry spokesman Zhao Lijian said that the U.S. was using national security as a means to "build up trade barricades".

Lijian also accused the Biden administration of forcing Samsung and Taiwan Semiconductor to hand over "sensitive information" related to their supply chains. Because, as we all know, the CCP always stays out of the plans of large China-based tech conglomerates. 

Lijian then accused Biden's actions of harming the supply chain for the U.S. and other countries. He suggested the U.S. "abandon the zero-sum game mindset, uphold a fair and nondiscriminatory business environment, and contribute to the building of an open world economy with concrete actions".