China is preparing for a protracted economic war in response to U.S. sanctions, according to the NYT
As U.S. President Donald Trump prepares for a visit to Beijing to hold talks with Chinese President Xi Jinping, both countries are simultaneously stepping up their preparations for a protracted economic standoff. China is signaling its readiness for an escalation and is putting new legal mechanisms in place to counter U.S. sanctions.
This is reported by the New York Times.
According to the publication, Beijing has stepped up efforts in recent weeks to develop legal tools to counter U.S. pressure, including new rules and restrictions on foreign businesses.
In particular, China:
- introduced a new legal mechanism to counter U.S. sanctions
- blocked Meta’s acquisition of a Chinese AI startup
- tightened rules for companies complying with Western requirements to exit the Chinese market
In April, Beijing also adopted regulations allowing regulators to inspect corporate data, question employees, and ban company executives from leaving the country if they move production out of China.
After the U.S. imposed sanctions on five Chinese oil refineries due to ties with Iran, China responded by ordering companies to ignore these restrictions, using a “blocking law” mechanism adopted back in 2021. Chinese state media called this “a shift from accumulating legal reserves to the practical application of legal weapons.”
Meanwhile, the U.S. continues to ramp up pressure. Over the past year, Washington has:
- raised tariffs on Chinese goods to 145%
- introduced fees for Chinese ships in U.S. ports
- restricted the export of critical technologies, including semiconductors and equipment
Experts note that businesses find themselves in a difficult situation where compliance with one country’s laws automatically means violating another’s.
“This poses both a risk and a dilemma: ‘Whose law will you violate—ours or America’s?’” said Sean Stein, president of the U.S.-China Business Council.
A telling example is the clothing manufacturer PVH (owner of the Calvin Klein and Tommy Hilfiger brands), which, after refusing to use cotton from Xinjiang, ended up on China’s “list of unreliable entities.”
Analysts note that the key issue of the upcoming meeting between Trump and Xi is whether the parties will be able to at least partially limit the use of economic sanctions as a tool of pressure.
The Chinese Ministry of Foreign Affairs has officially confirmed that U.S. President Donald Trump will arrive in Beijing at the invitation of Chinese leader Xi Jinping.
Delegations from the United States and China will hold the next round of trade talks in South Korea ahead of Donald Trump’s planned visit to Beijing. The parties are attempting to agree on key economic issues on the eve of important political contacts.
