China Uses American Playbook to Hit Back at U.S. in Trade War

China frequently condemns the United States for extending its reach beyond its borders to make demands on non-American companies.

Beijing for the first time announced it will require foreign firms to obtain Chinese government approval to export magnets containing even trace amounts of China-originated rare earth materials.

But when Beijing sought to retaliate against U.S. interests this month, it did precisely the same, Didi Tang reported for the Associated Press (AP).

In expanding export rules on rare earths, Beijing for the first time announced it will require foreign firms to obtain Chinese government approval to export magnets containing even trace amounts of China-originated rare earth materials—or those produced with Chinese technology.

That means a South Korean smartphone maker would need Beijing’s permission to sell its devices to Australia if the phones contain China-originated rare earth materials, said U.S. trade representative Jamieson Greer.

“This rule gives China control over basically the entire global economy in the technology supply chain,” he said.

For those familiar with U.S. trade practice, China is effectively borrowing a decades-old American policy: the foreign direct product rule, applied since 2018.

The rule extends the reach of U.S. law to foreign-made products and has been regularly used to restrict China’s access to certain U.S. technologies made outside the country—even when in the hands of foreign firms.

It is the latest example of Beijing adopting U.S. precedents as tools to confront Washington in what increasingly appears to be a prolonged trade war between the world’s two largest economies.