The Chinese Ministry of Commerce (MOFCOM) announced a series of retaliatory measures, including tighter export controls on drones and related technologies, sanctions against seven U.S. companies, and the launch of its first foreign trade-related national security investigation. “China’s countermeasures have been restrained overall. China values the hard-won stability of China-U.S. economic and trade relations. We hope the U.S. side can work with China in the same direction,” MOFCOM said in a statement. The Ministry highlighted that the measures were in response to recent U.S. actions, including the sanctioning of 43 Chinese companies under the anti-forced labor law and the Federal Communications Commission (FCC) bans on imports of new Chinese drones, robots, and power inverters.
Since 2020, China has broadened its economic toolkit, introducing a growing array of legal, regulatory and trade measures aimed at responding more forcefully to U.S. restrictions and reducing the asymmetry in available policy tools. China’s legal architecture now includes laws and regulations such as the Export Control Law, Unreliable Entity List, Anti-Foreign Sanctions Law and Foreign Trade Law. “They reveal that China’s countermeasures framework and toolkit have come of age,” said Sourabh Gupta, Resident Senior Fellow at the Institute for China-America Studies.
The most ambitious use of Beijing’s export controls came in April 2025, when China imposed sweeping restrictions on seven rare earths, triggering supply disruptions and temporary factory shutdowns around the world. A U.S.-China truce in October last year helped avert a full-blown crisis. “Beijing is signaling it has an expanding toolkit and is willing to use it, while leaving room to de-escalate,” Kyle Sullivan, Vice President at the U.S.-China Business Council, wrote in a social media post.
Sullivan also pointed to the first use of the national security investigation mechanism under China’s Foreign Trade Law, targeting imported printing and copying office equipment that uses foreign-made software. U.S. technology companies such as Microsoft and HP are among the major players in the printing software market. “The broader package also looks more calibrated and coordinated than some past retaliation,” he added. “It suggests China is building a more diversified toolkit for responding to U.S. economic-security measures rather than relying on ad hoc retaliation.” The U.S. State Department blamed China’s actions for disadvantaging U.S. businesses and harming American workers. However, the tit-for-tat escalation so far failed to derail the planned Trump-Xi summit in September in Washington. Kyle Sullivan of the USCBC added that despite the breadth of China’s measures, the “response looks fairly restrained.” “Beijing had considerably more painful options available and didn’t use them,” he said, as reported by the South China Morning Post.
