PREVIEW

China Quietly Builds Economic Weapons Against the U.S. China has taken advantage of a temporary trade truce with the United States to quietly expand a broad arsenal of economic pressure tools to strengthen its leverage over Washington. Despite maintaining a conciliatory public tone towards Donald Trump, Beijing has introduced new restrictions targeting critical sectors such as rare earths, semiconductors, and AI. These measures include tighter export controls on strategic materials, bans on foreign technology in sensitive industries, and policies designed to favour domestic supply chains. At the same time, new legal frameworks empower Chinese authorities to penalize foreign companies or governments deemed to harm China’s industrial interests. Analysts say this reflects a shift from reactive retaliation towards a more institutionalized strategy of economic statecraft, mirroring tools long used by the United States. The moves are also intended to prepare Beijing for the possible collapse of the truce later in 2026, ensuring it holds multiple “choke points” in global supply chains. Rising geopolitical tensions, including U.S. sanctions threats linked to Iran and ongoing disputes over technology exports, have accelerated China’s push to harden its economic defences. Ultimately, both powers appear to be entrenching their positions, with China seeking long-term leverage while the U.S. grapples with continued dependence on Chinese critical materials.
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