Days before President-elect Donald J. Trump, China prepares for economic battle with the United States.
He threatened a wide-ranging investigation into US chipmakers. It singled out an American retailer, accusing it of “improper conduct” that could lead to sanctions usually reserved for arms sellers. And he prepared to impose tariffs on imports of industrial plastics.
The flurry of retaliatory gestures, all made this week, could have far-reaching implications for American companies. They join other measures by China in recent weeks with one goal: to alert the incoming Trump administration.
“It’s a warning shot to the new administration that we won’t be left behind and we have leverage as well if the trade technology wars deepen,” said Myron Brilliant, senior adviser at Dentons Global Advisors-ASG. business consulting firm.
So far in the showdown between 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 it a military advantage.
In its final days, the Biden administration issued new rules to limit China’s access to semiconductors and imposed sanctions on mining, real estate, solar and shipping companies. Some observers called it “sanctions week against China.”
In the past, Beijing’s responses have been measured. But its words and actions are growing louder, and the targets of its retaliatory strikes are broadening to include supply chain vulnerabilities, critical minerals and individual companies.
China this week called Washington’s actions “absurd and highly irresponsible,” adding that “no amount of intimidation or coercion can shake China’s determination to be self-reliant.” It vowed 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 into China — a move aimed at companies such as Nvidia, Intel and Micron that already face scrutiny.
Nvidia is already under investigation by China’s antitrust regulator for possible violations of its antitrust laws. A think tank with ties to China’s Internet regulator recently called for a review of Intel. After Micron came under scrutiny from the same Internet regulator, it was cut off from supplying chips to much of China’s market.
China said the anti-dumping investigation was in response to complaints by domestic companies that U.S. chipmakers received unfair advantages due to subsidies and grants through the 2022 CHIPS and Science Act, the U.S. industrial policy aimed at boosting domestic chip manufacturing.
The policy had “caused a deep 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 as “no longer safe and reliable”.
The complaints echo those in Washington about China’s policy of shoveling money into domestic companies in defiance of global trade deals.
Likewise, Beijing’s punitive actions increasingly mirror those of Washington.
Chinese officials said Thursday that a preliminary investigation into PVH, the U.S. retailer that owns Calvin Klein and Tommy Hilfiger, found the company had “engaged in Xinjiang-related misconduct.”
The inspection came in response to the Uyghur Forced Labor Prevention Act enacted by the US Congress in 2021, which bans most imports from Xinjiang, a region in western China where the government has arrested large numbers of predominantly Muslim 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 that prohibit compliance with laws, sanctions or boycotts of other countries. The Ministry of Commerce has the authority to consider trade decisions as a threat to China’s national security. In complying with US law, PVH could be violating China’s rules.
China’s investigation could lead to PVH being placed on an “untrusted entity list”, a move that would give Beijing the ability to freeze its imports and exports from China, ban future investment and bar employees from the country. So far, China has placed American defense companies on that list for selling weapons to Taiwan, an area over which Beijing claims sovereignty.
In an emailed response, a PVH spokeswoman said the company complied with “all relevant laws and regulations in all countries and regions in which we operate” and “has been in communication with the Chinese Ministry of Commerce and will respond in accordance with the relevant regulations.”
China also said this week that 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 launched the probe last year, days after Washington added tariffs on Chinese electric vehicles and the European Union began investigating Chinese steel exports.
Some observers speculate that the investigations and threats now on both sides could give President-elect Trump, who is inaugurated on Monday, an opening to start making deals. Some Chinese officials hope that Mr. Trump will be incentivized to do so.
As an indication of her willingness to work with Mr. Trump, China said Friday that Vice President Han Zheng would attend Mr. Trump’s inauguration. Trump as a representative of Xi Jinping, the supreme leader of China. It will be the first time a high-ranking 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 research firm Trivium.
“On the one hand they will try to play with Trump’s challenges as a deal maker, but at the same time they are signaling that they are willing to take some punitive actions.”
Zixu Wang contributed reporting from Hong Kong.
