WASHINGTON (AP) — China likes to accuse the United States of reaching too far outside its borders to make demands on non-American companies. But this month, when China tried to counter US interests, it did exactly the same thing.
The Chinese government has announced for the first time that it will expand export restrictions on rare earths. Seek approval from foreign companies The Chinese government prohibits the export of magnets containing even minute amounts of rare earth materials originating in China or manufactured using Chinese technology.
This means South Korean smartphone makers will have to ask the Chinese government for permission to sell their devices to Australia if their phones contain rare earth materials originating from China, US Trade Representative Jamieson Greer said. “This rule gives China control over essentially the entire global economy in the technology supply chain,” he said.
Anyone familiar with U.S. trade practices knows that China is simply borrowing from decades of U.S. policy: the Foreign Direct Goods Rule. The law extends the reach of U.S. law to foreign products and is regularly used to restrict China’s access to certain U.S. technologies manufactured outside the United States. Even if it is in the hands of a foreign company.
This is the latest example of Beijing relying on U.S. precedent for the tools it needs to keep tabs on Washington. Extending the trade war between the world’s two largest economies.
“China is learning from the best,” said Neil Thomas, a China politics researcher at the Center for China Analysis at the Asian Social Policy Research Institute. “China has seen how effectively U.S. export controls limit its economic development and political choices, so it is copying the U.S. strategy.”
He added: “The game knows the game.”
This idea dates back to at least 2018
The president took office in 2018. donald trump The reason for starting the trade war with China is that Beijing feels an urgency to adopt a set of laws and policies that can be put in place quickly in the event of a new trade conflict. He turned to Washington for ideas.
The Unreliable Entity List established by China’s Ministry of Commerce in 2020 is similar to the US Department of Commerce’s Entity List, which restricts certain foreign companies from doing business with the US.
In 2021, the Chinese government adopted an anti-foreign sanctions law that allows agencies such as China’s Ministry of Foreign Affairs to deny visas and freeze assets of unwelcome individuals and companies. This is similar to what the US State Department and the US Treasury Department can do.
In a 2021 report, state news agency China News called it a toolkit to counter foreign sanctions, intervention and long-term jurisdiction, cited ancient Chinese teachings and said Beijing would “fight back with the enemy’s methods.”
Li Qingming, a Chinese scholar quoted in news reports, said the law “scrutinized relevant foreign laws and took into account the basic principles of international law and international relations.” He also said it could deter escalation on the other side.
Other formal measures taken by the Chinese government over the past few years include expanded export controls and foreign investment screening tools.
Jeremy Dome, a senior fellow in law and a senior fellow at the Paul Tsai China Center at Yale Law School, said the Chinese government often looks to foreign models when formulating laws in non-trade and non-foreign-related areas. China is exploring the ability to retaliate in kind in trade and sanctions, but its tools are often “very similar” to those of the United States, he said.
Daum said both governments have also adopted a “holistic view of national security” that extends the concept to justify mutual restrictions.
Things have accelerated this year
When President Trump launched a trade war with China shortly after returning to the White House earlier this year, Beijing quickly introduced new measures in addition to increasing tariffs comparable to those imposed by the U.S. president.
In February, after President Trump imposed his first 10% tariff on China over allegations that the Chinese government had failed to curb the flow of chemicals used to make fentanyl, the Chinese Ministry of Commerce announced Place PVH groupthe company that owns Calvin Klein and Tommy Hilfiger, as well as the biotech company Illumina, are on the list of untrusted entities.
This prohibits China-related import and export activities and new investments in the country. The Chinese government also announced export restrictions on tungsten, tellurium, bismuth, molybdenum and indium, all of which are essential elements in the production of modern high-tech products.
When President Trump imposed a second 10% tariff on fentanyl in March, the Chinese government Places 10 more US companies It added 15 U.S. companies to its list of unreliable companies, including aerospace and defense companies such as General Dynamics Land Systems and General Atomics Aeronautical Systems, which it claims “put China’s national security and interests at risk.”
Then, in April, so-called “Liberation Day” tariffs went into effect, with the Chinese government not only matching President Trump’s sky-high 125% tariffs, but also blacklisting and announcing even more American companies. More rare earth mineral export restrictions. The move temporarily halted shipments of magnets needed to make a wide range of products, including smartphones, electric cars, jets and missiles.
New tools allow China to keep its eye on the United States, but it’s not without risks, Daum said.
“The danger with such a balanced and fair approach is that what one side sees as reciprocity may be interpreted by the other as escalation,” he said. And secondly, “No one wins in a race to the bottom.”
