As the U.S.-China trade conflict intensifies, Beijing is shifting its focus to non-tariff measures aimed squarely at American industries where the U.S. holds economic leverage. While the Trump administration has escalated tariffs on Chinese goods, reaching up to 245% on select imports, China is deploying regulatory tools to disrupt U.S. services trade, rare-earth mineral access, and key corporate operations within its borders.
The U.S. has maintained a $32 billion annual services trade surplus with China, driven by sectors like education, tourism, legal consulting, and financial services. Beijing is now tightening restrictions in these areas: reducing film imports, discouraging Chinese students from studying in the U.S., and hinting at probes into American legal and consultancy firms for alleged monopolistic practices. Nomura estimates that up to $24 billion in travel-related revenue could be at risk if China further restricts tourism to the U.S.
China’s Ministry of Commerce has placed multiple U.S. companies on an “unreliable entity” list, including PVH (NYSE: PVH), Illumina (NASDAQ: ILMN), and subsidiaries of DuPont (NYSE: DD), effectively barring them from Chinese markets. Antitrust investigations into Google (NASDAQ: GOOGL) and other tech giants are also underway, signaling Beijing’s willingness to target high-profile American brands.
Export controls on rare-earth minerals, critical for semiconductors, defense systems, and renewable energy, have been tightened, requiring Chinese suppliers to obtain special licenses before shipping these materials abroad. Analysts warn this could disrupt global supply chains, particularly for U.S. manufacturers reliant on Chinese minerals.
China’s measures appear designed to inflict maximum political discomfort. By restricting agricultural and energy exports from Trump-supporting states like Iowa and Nebraska, Beijing is leveraging non-tariff barriers that are harder to circumvent than traditional duties. For example, China has quietly blocked imports of U.S. beef, poultry, and liquefied natural gas through bureaucratic delays and third-party sales restrictions.
“Beijing is clearly signaling to Washington that two can play in this retaliation game and that it has many levers to pull, all creating different levels of pain for U.S. companies,” said Wendy Cutler, vice president at the Asia Society Policy Institute.
Jing Qian of the Center for China Analysis notes that while the direct financial impact of service-sector restrictions may be limited, the “reputational effects, such as fewer Chinese students or more cautious Chinese employees, could ripple through academia and the tech talent ecosystem”.
Despite China’s insistence that talks must occur on “equal footing,” hopes for near-term diplomacy are fading. Gabriel Wildau of Teneo highlights that U.S. firms operating in China remain Beijing’s most potent pressure point, with sanctions and export controls serving as bargaining chips.
The conflict risks accelerating systemic decoupling, not just in trade but in regulatory standards, technology ecosystems, and cross-border collaboration. As both nations dig in, businesses face a fragmented global market where geopolitical strategy increasingly dictates commercial outcomes.
