China expands economic toolkit

China spent its trade truce with the United States building new ways to squeeze supply chains, technology flows and foreign companies. (reuters.com) Reuters reported on April 26 that Beijing expanded legal and economic countermeasures ahead of a summit next month between President Xi Jinping and President Donald Trump. The current truce dates to an agreement the two signed in Busan, South Korea, in October 2025, and it is set to expire in November 2026. (reuters.com) The new steps run beyond tariffs. On April 15, Chinese officials held initial talks on limiting exports of the most advanced solar-panel manufacturing equipment to the United States; China makes more than 80% of the world’s solar-panel components, Reuters said. (reuters.com) On April 13, China’s State Council issued regulations authorizing countermeasures against foreign states for “unlawful extraterritorial jurisdiction.” Reuters said state media presented the decree as a tool against secondary sanctions and export-control spillovers such as de minimis thresholds. (reuters.com) Six days earlier, on April 7, the State Council issued industrial and supply-chain security regulations that let authorities investigate and act against foreign countries, companies or international organizations accused of discriminatory measures against China’s supply chains. (reuters.com) The campaign also reached Japan. Reuters said China barred exports of dual-use items to 20 Japanese entities on February 24 and had already begun restricting heavy rare earths and magnets to Japanese companies on January 9. (reuters.com) Inside China, Beijing pushed companies toward local technology. Reuters said authorities told domestic firms on January 14 to stop using cybersecurity software from more than a dozen U.S. and Israeli companies, and on December 30, 2025, required chipmakers adding capacity to use at least 50% domestically made equipment. (reuters.com) The legal architecture has been filling in behind those moves. China’s March 2025 implementing regulations for the Anti-Foreign Sanctions Law spelled out property freezes, transaction bans and coordination across State Council departments, while also opening the door to more private lawsuits in Chinese courts. (jonesday.com) China has also kept older tools active. The Commerce Ministry said in October 2025 that it was using the Unreliable Entity List under the Foreign Trade Law, National Security Law and Anti-Foreign Sanctions Law against foreign entities including Dedrone by Axon and TechInsights. (english.mofcom.gov.cn) Even where Beijing paused some controls after later trade talks, the machinery stayed in place. Pillsbury wrote that China suspended implementation of several October 2025 critical-mineral export controls for one year, but said companies should still map Chinese-origin content and prepare for reactivation. (pillsburylaw.com) That leaves the truce looking narrower than the headline suggests: fewer tariff escalations for now, but a larger Chinese toolkit for retaliation, licensing and supply-chain pressure. (reuters.com)