China isn’t just fighting back, it’s fighting smart. By borrowing America’s own trade war tactics, Beijing is turning Washington’s long-arm rules against it in a high-stakes economic showdown.
China is fighting back in its escalating trade war with the United States, and it’s doing so by deploying the very same tactics Washington has used against it for years. In expanding export rules on rare earths this month, Beijing introduced a sweeping measure requiring foreign firms to seek Chinese government approval to export magnets containing even small amounts of China-originated rare earth materials or produced using Chinese technology.
That means, for example, a South Korean smartphone maker would need Beijing’s permission to sell devices to Australia if they contain China-originated rare earths. “This rule gives China control over basically the entire global economy in the technology supply chain,” an AP report cited Jamieson Greer, a US trade representative, as saying.
For anyone familiar with US trade tactics, this move mirrors America’s foreign direct product rule, which extends the reach of US law to foreign-made products and has been used to restrict China’s access to critical technologies. It’s a clear signal that Beijing is now borrowing from Washington’s own playbook.
Learning From the Best
“China is learning from the best,” said Neil Thomas, a fellow on Chinese politics at the Asia Society Policy Institute’s Center for China Analysis. “Beijing is copying Washington’s playbook because it saw firsthand how effectively US export controls could constrain its own economic development and political choices.”
He added pointedly: “Game recognises game.”
This strategy is the culmination of years of preparation. Since the start of the trade war in 2018 under then-US President Donald Trump, Beijing has been building a legal and policy arsenal inspired by Washington’s methods.
Beijing’s Countermeasures Take Shape
In 2020, Beijing launched its Unreliable Entity List, closely resembling the US Commerce Department’s entity list that restricts foreign firms from doing business with American companies, the report further highlighted.
A year later, it enacted the anti-foreign sanctions law, empowering agencies like the Foreign Ministry to freeze assets and deny visas to individuals and businesses — a mirror image of US sanction mechanisms.
State-run China News Service described this strategy as “hitting back with the enemy’s methods.” Chinese scholar Li Qingming noted that the law was designed after reviewing foreign legislation and international legal principles, calling it a deterrent against further escalation.
Beijing has also introduced expanded export controls and foreign investment review tools, further aligning its regulatory approach with that of Washington.
Jeremy Daum, a senior research scholar at Yale Law School’s Paul Tsai China Center, said China often draws from foreign models. As it develops retaliation capabilities in trade and sanctions, the tools are often “very parallel” to those of the US. Both governments, he added, have adopted a “holistic view of national security,” widening the scope of trade restrictions.
Tools Deployed as Trade War Escalates
When Trump returned to the White House earlier this year and reignited the trade war, Beijing wasted no time deploying these tools.
In February, after Trump imposed a 10% tariff on Chinese exports over fentanyl-related concerns, China added PVH Corp. (owner of Calvin Klein and Tommy Hilfiger) and Illumina, Inc. to its Unreliable Entity List — effectively barring them from new investments or trade with China. It also imposed export controls on key elements like tungsten, tellurium, bismuth, molybdenum, and indium, essential for high-tech manufacturing.
In March, after another 10% tariff, Beijing targeted 10 more US firms and added 15 companies including defense giants General Dynamics Land Systems and General Atomics Aeronautical Systems, to its export control list, citing threats to national security.
Then came April’s “Liberation Day” tariffs: a 125% retaliatory tariff, an expanded blacklist, and new export restrictions on rare earth minerals. The move disrupted shipments of critical components needed for smartphones, electric vehicles, jet planes, and missiles.