Days before newly elected President Donald J. Trump takes office, China is preparing for economic battle with the United States.
It threatened a widespread investigation into American chipmakers. It targeted one U.S. retailer, accusing it of “inappropriate behavior” that could lead to sanctions typically reserved for arms sellers. And the country was preparing to impose tariffs on imports of industrial plastics.
The wave of retaliatory measures, all implemented this week, could have far-reaching consequences for American companies. They join other measures taken by China in recent weeks with one goal: to put the new Trump administration on notice.
“It's a warning shot to the new administration that we won't sit back, and we also have leverage in the event of a deepening of the trade technology wars,” said Myron Brilliant, a senior advisor at Dentons Global Advisors-ASG, a business advisory firm.
So far, in the battle among the world's superpowers, Washington has set the tone for tough measures aimed at curbing China's economic influence and stifling the development of industries that could give the country a military edge.
In its final days, the Biden administration has issued new rules to restrict Chinese access to semiconductors and imposed fines on companies in mining, real estate, solar energy and shipping. Some observers called it “China Sanctions Week.”
In the past, Beijing's responses were measured. But his words and actions are becoming increasingly pointed, and the targets of his retaliatory attacks are broadening to include supply chain vulnerabilities, critical minerals and individual companies.
China this week called Washington's actions “irrational and deeply irresponsible,” adding that “no amount of bullying or coercion can shake China's determination to be self-reliant.” It pledged to “defend its own sovereignty, security and development interests.”
Then regulators in Beijing took action. The Commerce Department said it would investigate whether the United States was dumping low-end chips on China — a move aimed at companies like Nvidia, Intel and Micron that are already under scrutiny.
Nvidia is under investigation by China's anti-monopoly regulator for possible antitrust violations. A think tank with ties to China's internet regulator recently called for an overhaul of Intel. After Micron underwent a review by the same internet regulator, the company was banned from supplying chips to much of the Chinese market.
China said the anti-dumping investigation was in response to complaints from domestic companies that U.S. chipmakers received unfair advantages because of subsidies and subsidies through the CHIPS and Science Act of 2022, the U.S. industrial policy aimed at boosting chip production domestically.
The policy had “had a profound and significant impact on the global semiconductor supply chain,” the China Semiconductor Industry Association said, adding that it hoped the investigations would “create a healthy and orderly market environment for industrial development.”
The same industry group previously called for a boycott of US chips because they are 'no longer safe and reliable'.
The complaints are similar to those from Washington about China's policy of pumping money into homegrown companies, in defiance of global trade agreements.
Likewise, Beijing's punitive measures increasingly mirror Washington's.
Chinese officials said Thursday that a preliminary investigation into PVH, the U.S. retailer that owns Calvin Klein and Tommy Hilfiger, found that the company had “engaged in inappropriate Xinjiang-related behavior.”
The investigation came in response to the Uyghur Forced Labor Prevention Act passed by the US Congress in 2021, which bans most imports of products from Xinjiang, a region in far western China where the government has detained large numbers of predominantly Muslim people . minorities. This week, the Biden administration said it would block imports from more than three dozen Chinese companies under the law.
China has quietly passed its own laws banning enforcement of laws, sanctions or boycotts in other countries. The Ministry of Commerce has the authority to consider commercial decisions as a threat to China's national security. By complying with US law, PVH could be violating Chinese regulations.
The Chinese investigation could lead to PVH being placed on an “unreliable entity list,” a move that would give Beijing the ability to halt its imports and exports from China, ban future investments and ban workers from the country . So far, China has placed American defense companies on this list for selling weapons to Taiwan, a region over which Beijing claims sovereignty.
In an email response, a PVH spokeswoman said the company complied with “all relevant laws and regulations in all countries and regions in which we operate” and was “in communication with China's Ministry of Commerce and will respond in accordance with the relevant regulations. .”
China also said this week it would impose tariffs on industrial plastics from January 24. The news followed a months-long anti-dumping investigation into polyformaldehyde copolymer, a chemical exported by companies in the United States, the European Union and Japan.
China began the investigation last year, days after Washington imposed tariffs on Chinese electric vehicles and the European Union began investigating steel exports from China.
Some observers speculate that the investigations and threats now in place on both sides could give President-elect Trump, who will be inaugurated Monday, an opening to make deals. Some Chinese officials hope Trump will be encouraged to do so.
In a sign of its willingness to engage with Mr. Trump, China said on Friday that Vice President Han Zheng would attend Mr. Trump's inauguration as a representative of Xi Jinping, China's top leader. It would be the first time that a senior Chinese leader has attended such a ceremony.
“There is an implicit carrot-and-stick approach to China's strategy toward Trump,” said Joe Mazur, an analyst at Trivium, the research firm.
“On the one hand, they will try to play to Trump's tendencies as a dealmaker, but at the same time they indicate that they are willing to take some punitive measures.”
Zixu Wang contributed reporting from Hong Kong.
