China Adopts U.S.-Style Trade Tactics in Escalating Economic Conflict

Mirroring American Trade Tactics

China is implementing trade measures that closely resemble decades-old U.S. policies in its escalating economic confrontation with Washington, according to trade experts and analysts monitoring the situation. The approach marks a significant departure from Beijing’s previous trade strategies and represents what observers describe as adopting the “enemy’s methods” in response to American trade actions.

Mirroring American Trade Tactics
Expanding Export Controls
Learning from U.S. Precedents
Building a Legal Toolkit Since 2018
Accelerated Implementation in Recent Months
Strategic Risks and Considerations

Expanding Export Controls

Beijing recently expanded export regulations covering rare earth minerals, requiring foreign companies to obtain Chinese government approval for exporting products containing even minimal amounts of China-originated rare earth materials or those manufactured using Chinese technology. The move, analysts suggest, effectively extends Beijing’s regulatory reach beyond its borders in a manner similar to how the United States has historically exercised jurisdiction over foreign-made products containing American technology.

According to reports cited by the U.S. trade representative’s office, this regulation means that a South Korean smartphone manufacturer would need Beijing’s permission to sell devices containing Chinese rare earth materials to markets like Australia. Trade representatives reportedly expressed concern that the rule could give China substantial influence over global technology supply chains.

Learning from U.S. Precedents

Sources familiar with U.S. trade practice indicate China is essentially adopting a version of the foreign direct product rule, a long-standing American policy that extends U.S. legal authority to products manufactured outside the country. This approach has been regularly employed by Washington to restrict China’s access to certain technologies, even when those technologies are possessed by foreign companies.

“China is learning from the best,” according to Neil Thomas, a fellow on Chinese politics at Asia Society Policy Institute’s Center for China Analysis, as quoted in the source material. “Beijing is copying Washington’s playbook because it saw firsthand how effectively U.S. export controls could constrain its own economic development and political choices.”

Building a Legal Toolkit Since 2018

The strategic shift reportedly began taking shape in 2018 when the Trump administration initiated the trade war, prompting Beijing to develop legal instruments for responding to trade conflicts. Analysis of China’s subsequent legislative actions reveals a pattern of adopting measures similar to American models.

In 2020, Beijing established its Unreliable Entity List, which closely resembles the U.S. Commerce Department’s entity list that restricts certain foreign companies from conducting business with American entities. The following year, China implemented an anti-foreign sanction law enabling agencies like the Chinese Foreign Ministry to deny visas and freeze assets of targeted individuals and businesses – powers similar to those exercised by the U.S. State Department and Treasury Department.

State media reportedly characterized these measures as a “toolkit against foreign sanctions, intervention and long-arm jurisdiction,” citing ancient Chinese teachings about using an opponent’s methods against them.

Accelerated Implementation in Recent Months

The pace of China’s retaliatory measures has reportedly intensified this year following the return of President Trump to the White House and his imposition of additional tariffs. According to trade analysts, Beijing has responded by deploying its newly developed legal instruments alongside matching tariff increases.

In February, the Chinese Commerce Ministry reportedly placed PVH Group, owner of Calvin Klein and Tommy Hilfiger, along with biotechnology company Illumina, on its unreliable entity list. This action barred them from China-related import/export activities and new investments in the country. Beijing also announced export controls on several elements critical for high-tech manufacturing.

Subsequent months saw additional U.S. companies added to China’s control lists, including aerospace and defense firms, with Beijing asserting they “endanger China’s national security and interests.” The expansion of controls to rare earth minerals has particularly impacted global supply chains, reportedly affecting production of smartphones, electric vehicles, aircraft, and military equipment.

Strategic Risks and Considerations

While these measures have provided China with enhanced retaliatory capabilities, analysts suggest they carry significant risks. According to Jeremy Daum, a senior research scholar at Yale Law School’s Paul Tsai China Center, the danger lies in how actions perceived as reciprocal by one side might be interpreted as escalation by the other.

Both governments have reportedly adopted a “holistic view of national security” that expands the concept to justify restrictions against each other. Experts caution that in such an escalating trade conflict, the pursuit of tit-for-tat measures could ultimately prove detrimental to both economies and global economic stability.

As the trade war between the world’s two largest economies continues to evolve, observers suggest that China’s adoption of American-style trade weapons represents a new phase in global economic competition – one where the rules and tools developed by Western nations are increasingly being turned against them.