China slapped anti-dumping measures on Japanese shipments of a chemical used in the production of semiconductors on Tuesday, a fairly targeted move that nonetheless escalates a diplomatic dispute with Tokyo over Taiwan.

The Chinese Commerce Ministry has unveiled preliminary measures on imports from Japan of dichlorosilane, a chemical required to process silicon wafers into chips. Companies importing the substance must now provide cash deposits of up to 99.2%.

Tokyo will closely examine the measures, assess their impact and work with firms to prevent undue disruptions on businesses, Chief Cabinet Secretary Minoru Kihara said.