China announced Thursday that it was adding dozens of U.S. companies to its export control list to “protect national security and interests.”
China’s Commerce Ministry said it would impose measures on 28 U.S. entities and also ban exports of dual-use items to listed companies starting Thursday, reported THE Global Times, a Chinese daily considered aligned with Beijing, and THE government news agency Xinhua. Dual-use goods refer to those that can be used for civilian or military purposes.
China also sanctioned 10 defense companies on Thursday for their military sales to Taiwan, the self-governing island that China claims as its own, adding them to China’s “Unreliable Entity List,” the ministry said. according to AFP.
“It really seems like a warning shot that the escalation of U.S. policy against China, particularly under Trump, will lead to a more aggressive response,” Jesse Schreger, associate professor of macroeconomics at Columbia Business School, told CBS MoneyWatch. “China signals it will not passively accept tariffs.”
The threat not to sell dual-use goods to listed companies could have consequences, given China’s role as a global manufacturing power, Schreger said. It is unclear how China intends to implement the measures and which products will be considered dual-use and whose sales will therefore be restricted. Tires, for example, could be considered produced for both civilian and military use, he noted.
The moves come as Beijing prepares for President-elect Donald Trump’s return to the White House and after the Biden administration expanded restrictions on Chinese businesses amid growing back-and-forths. During his presidential campaign, Trump also raised the idea of imposing a rate of up to 60% on all Chinese products.
“The desire to impose high tariffs on China seems credible, looking back at the first Trump administration and its willingness to use [tariffs] for geopolitical purposes,” Schreger proposed. “The Biden administration has not undone this – in fact, it has professionalized it. The Trump administration’s rhetoric could have been stronger, but the Biden administration has taken this economic battle to the next level. »
China last month said he was investigating American chip maker Nvidia for potential violations of Chinese anti-monopoly laws.
China’s action comes less than a week later put sanctions against seven companies in response to recently announced U.S. military sales and aid to Taiwan.
Nonetheless, Beijing’s sanctions against U.S. defense companies tend to have a moderate impact given that U.S. military companies do not sell weapons or related goods to China. Tit-for-tat trade measures could also be limited, some analysts believe.
“Changes to immigration, trade, and fiscal policy under the second Trump administration will likely be significant, but they will fall short of some of the more dramatic proposals,” Goldman Sachs analysts said in a recent report. “We expect tariffs on imports from China and on automobiles, but not universal tariffs, which would pose economic and political risks that we believe the White House would prefer to avoid.”
contributed to this report.
