![\"From](\"https:\/\/static.toiimg.com\/thumb\/msid-130558400,imgsize-1057648,width-400,height-225,resizemode-4\/us-president-donald-trump-chinese-president-xi-jinping.jpg\")
<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div><\/div>\n<\/div>\nThe last meeting between US President Donald Trump and Chinese President Xi Jinping ended on a positive note. Trump had rated the summit a \u201c12 out of 10\u201d, and White House said China would \u201ceffectively eliminate\u201d rare earth export controls and stop retaliatory actions against American firms.However, recent developments suggest that Beijing has altered its approach.Even though China has avoided openly criticising Trump over the Iran conflict and signalled interest in constructive engagement ahead of another proposed summit, it has moved in parallel to expand its economic leverage against Washington.<\/p>\n Watch<\/span><\/p>\n 39 Days in Iran Changed Everything: Why China Is Watching America’s Depleting Missile Stockpile<\/div>\n<\/div>\n<\/div>\n <\/p>\n A series of steps introduced since the October meeting highlight this shift. Beijing has tightened licensing rules for rare earth exports, introduced laws targeting companies relocating supply chains out of China, and blocked foreign AI chips from use in state-funded data centres. It has also prohibited Chinese firms from using certain US and Israeli cybersecurity software and is considering restricting exports of advanced solar manufacturing equipment to the United States.Analysts say that these moves go beyond routine retaliation and instead point to a broader strategy. China appears to be building a more structured set of economic pressure tools, something long associated with US policy, at a time when both sides are operating under a temporary trade truce. That agreement, due to run until November 2026, had been shaped in part by China\u2019s earlier threat to curb rare earth exports, which quickly disrupted US auto supply chains and brought Washington to the negotiating table in Busan, South Korea.\u201cThe hope on the Chinese side is for a longer lasting, more broadly rooted truce, but it’s very much that ‘if you want peace, prepare for war’ logic,\u201d Joe Mazur of Trivium China told Reuters.China has continued to refine its options since then.In April, Premier Li Qiang approved two new regulations giving authorities wide-ranging powers to act against foreign entities accused of discriminating against China\u2019s industrial system or applying what Beijing calls \u201cunjustified extraterritorial jurisdiction\u201d. These rules allow officials to deny entry, expel individuals and seize assets where violations are found.<\/p>\n The timing also reflects broader geopolitical tensions. When US Treasury Secretary Scott Bessent warned in mid-April of potential sanctions on buyers of Iranian oil, most of which is purchased by China, the response from Beijing-linked voices was swift. Yuyuan Tantian, associated with state broadcaster China Central Television, described the new framework as part of a wider set of legal countermeasures, noting: \u201cIn the past, our countermeasures were largely concentrated in the trade domain. But today’s international friction is comprehensive, and those tools are no longer sufficient.\u201dBusiness groups have flagged concerns about the immediate implementation of these rules. Michael Hart of the American Chamber of Commerce in China said companies were given no chance to provide feedback. \u201cCompanies now face an asymmetry: China can reduce purchases from foreign firms with little consequence, while a foreign company that cuts its dependence on China risks investigation,\u201d he said.At the same time, the United States has maintained its own pressure. It launched fresh trade probes in March into China\u2019s industrial capacity and labour practices, while continuing export restrictions on semiconductors and chipmaking technology, limits that have constrained China\u2019s ability to produce advanced chips.\u201cIt\u2019s because of export controls that China doesn’t have access to some of the most advanced semiconductor manufacturing equipment in the world,\u201d said Chim Lee of the Economist Intelligence Unit.This competition for leverage has spilled into commercial negotiations as well, including discussions over large aircraft purchases from Boeing. While China is seeking aircraft and spare parts, US officials have tied progress to the supply of yttrium, a rare earth element needed for jet engine production.China, for its part, has strengthened domestic requirements. Since late 2025, chipmakers have been required to source at least half of new equipment locally. At the same time, foreign AI chips are being phased out of state-backed data centres, and restrictions on overseas cybersecurity tools have been tightened, steps that encourage domestic alternatives while limiting access for US suppliers.Concerns over the broader impact are growing. The European Chamber of Commerce in China has warned that China\u2019s evolving export control framework could \u201cdisrupt global supply chains on an unprecedented scale, leading to both economic and non-economic damage.\u201dAs Washington works to reduce its reliance on Chinese critical materials, Beijing is actively identifying new pressure points. Early discussions have already been held with solar equipment manufacturers about restricting exports of cutting-edge technology to the US.<\/div>\nBeijing\u2019s \u2018rare\u2019 move<\/h2>\n<\/p>\n
Rising tensions and ripple effects<\/h2>\n<\/p>\n