China comes out swinging as Trump trade war looms

Recent moves on Nvidia, critical minerals and drones signal the sort of retaliatory measures Beijing could use to hit back against U.S.

- Rebecca Feng, Heather Somerville & Jon Emont

During Donald Trump's first administration, China learned that it couldn't match the much larger U.S. economy tit-for-tat when it came to tariffs, and quickly found other ways to try to inflict pain—often by borrowing from his playbook.

Now, as Trump's second stint in office approaches, Beijing is brandishing an expanded arsenal of countermeasures that it is likely to draw upon as the president-elect threatens across-the-board tariffs and levies of as high as 60% on Chinese-made goods.

In recent days, Beijing has launched a regulatory probe into U.S. semiconductor champion Nvidia, threatened to blacklist a prominent American apparel maker, blocked the export of critical minerals to the U.S., and squeezed the supply chain for drones, offering clues into how non-tariff measures are likely to dominate China's tool kit.

Because the U.S. buys so much more from China than the other way around—roughly three times as much—Beijing simply can't hit back dollar for dollar when it comes to tariffs. Doing so would also risk exacerbating the myriad woes in China's economy.

Instead, as with any fight against a larger foe, it pays to find unique points of leverage to exploit—with many of its efforts to inflict pain on the U.S. coming from Washington's own strategies.

On Monday, Chinese market regulators announced an antitrust investigation into Nvidia, roughly a week after the outgoing Biden administration stepped up restrictions on China's access to high-end semiconductors. Beijing says the Santa Clara, Calif.-based chip giant may have violated the terms of a conditional approval it received from Beijing in 2020 for its acquisition of an Israeli networking firm.