To hit back at the United States in their trade war, China borrows from the US playbook

Key Points

China's New Export Rules: Beijing has introduced export controls on rare earths, requiring foreign firms to obtain Chinese government approval to export magnets with even small amounts of China-originated rare earth materials or technology, impacting global technology supply chains.**
Mirroring U.S. Policies: China is adopting strategies similar to the U.S. foreign direct product rule, extending control over foreign-made products, a tactic long used by Washington to limit China's access to certain technologies.**
Trade War Escalation: Since 2018, and accelerating under recent U.S. tariffs, China has developed retaliatory tools like the Unreliable Entity List and anti-foreign sanction laws, mirroring U.S. measures to counter trade conflicts.**
Recent Actions: In response to U.S. tariffs in 2023, China has placed U.S. companies on restrictive lists, imposed export controls on critical elements, and matched high tariffs, intensifying the trade war.**
Risks of Reciprocity: Experts warn that while China's mirrored approach appears balanced, it risks being seen as escalation, potentially leading to a detrimental "race to the bottom" in U.S.-China relations.**

Summary

This article explores China's adoption of U.S.-style trade policies to counter American economic pressures amid an escalating trade war between the world's two largest economies. Beijing has introduced export controls on rare earths, requiring foreign firms to seek approval for exporting products containing Chinese materials or technology, significantly impacting global tech supply chains. Since 2018, and especially under recent U.S. tariffs initiated by President Trump, China has mirrored U.S. strategies like the foreign direct product rule with tools such as the Unreliable Entity List and anti-foreign sanction laws. These measures, including blacklisting U.S. companies and imposing export controls on critical elements, aim to retaliate against U.S. actions like high tariffs over issues such as fentanyl. While China's approach allows it to challenge Washington directly, experts caution that what Beijing views as reciprocity might be perceived as escalation, risking a downward spiral in relations. This tit-for-tat dynamic, fueled by both nations' expansive views of national security, underscores the complexities and dangers of the ongoing trade conflict.

To hit back at the United States in their trade war, China borrows from the US playbook

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