Beyond Tariffs

China's Multi-Domain Response to US Economic Pressure

The Evolving Battleground of US-China Economic Competition

Over the past few weeks, U.S.-China trade relations have intensified significantly, marked by escalating tariffs and retaliatory measures. On April 9, 2025, the U.S. raised its tariff on Chinese imports to 125%, later clarified to 145% when accounting for prior tariffs, including Section 301 duties and sector-specific levies. In response, China increased its tariffs on U.S. goods from 84% to 125%, effective April 12, matching the U.S.'s reciprocal rates. Both nations now tax nearly all bilateral trade at these elevated rates, with China's average tariff on U.S. exports reaching 147.6%. These actions have destabilized global markets and heightened economic competition, with both sides vowing to continue retaliatory measures while emphasizing domestic economic resilience.

The recent exclusion of smartphones and computer products from the Trump Tariffs highlights the central paradox of contemporary US-China competition: intense rivalry coupled with deep technological interdependence. This strategic carve-out for electronics reflects the administration's recognition of the deeply intertwined supply chains between the two powers, particularly in the semiconductor sector that sits at the heart of modern digital infrastructure. The tactical exemption acknowledges the reality that disrupting these technological linkages would generate significant domestic economic costs, potentially outweighing strategic benefits.

China's Comprehensive Approach to Economic Competition

When analyzing Beijing's trade war strategy, we can apply the "unrestricted warfare" framework articulated in the PLA literature. This doctrine, first developed by PLA theorists Qiao Liang and Wang Xiangsui, transcends traditional security architectures to incorporate multiple domains into a cohesive competitive strategy. China's "Three Warfares" doctrine—encompassing public opinion warfare (media manipulation to shape perceptions), psychological warfare (operations to influence decision-making), and legal warfare (using international and domestic law as a weapon)—provides a comprehensive framework for non-kinetic competition across multiple domains.

Rather than merely implementing reciprocal tariffs, China has deployed a sophisticated, multi-domain toolkit that leverages administrative and regulatory tools to target politically sensitive industries. Understanding this approach is essential for anticipating China's response to the current round of trade pressure.

Non-Tariff Barriers as Economic Weapons

According to recent Politico reporting, China has implemented sophisticated non-tariff barriers to escalate the trade conflict, specifically targeting key US exports like beef, poultry, and liquefied natural gas through bureaucratic hurdles and regulatory obstacles. These measures specifically target industries in politically significant states with strong Trump support, such as Iowa and Nebraska, making them strategically impervious to tariff-related workarounds.

What makes these tactics particularly effective is their plausible deniability. Beijing systematically restricts imports under the guise of health and safety concerns, a technique it has refined since joining the World Trade Organization in 2001. For instance, Chinese authorities have denied export licenses for US meatpacking plants and alleged contamination in poultry products, creating regulatory barriers that function effectively as trade weapons while maintaining the appearance of legitimate governance.

Supply Chain Leverage as Strategic Asset

Beyond agricultural products, Beijing has halted imports of US natural gas and imposed export controls on critical minerals essential for clean energy and defense technologies. This approach leverages China's dominant position in global supply chains for strategic materials, particularly rare earth elements essential for advanced electronics and defense systems.

These actions reflect what academics and intelligence analysts term "weaponized interdependence" - the strategic exploitation of asymmetric positions within global networks to advance national interests. By controlling key nodes in critical mineral supply chains, China has created pressure points that exist outside the conventional tariff regime, demonstrating that trade war responses extend far beyond simple reciprocal duties.

The Global South Dimension: Economic Statecraft Beyond Bilateral Relations

While raising barriers against the United States, China is simultaneously pursuing a contradictory strategy with developing nations. In March 2025, Beijing announced a zero-tariff regime for 95% of products imported from the least-developed African countries, including Lesotho, Ethiopia, and the Democratic Republic of Congo, expanding on previous Forum on China-Africa Cooperation commitments.

This strategic contrast exemplifies China's sophisticated understanding of economic statecraft. By creating a narrative juxtaposition between America's protectionist measures and China's apparent trade liberalization with developing nations, Beijing positions itself as a more reliable partner for the Global South while isolating the United States in international forums.

Section 232 and the New Semiconductor Battlefield

The Trump administration's plan to direct the Commerce Department to initiate a Section 232 investigation into semiconductor imports represents another major front in this expanding economic competition. This probe, utilizing national security provisions under the Trade Expansion Act of 1962, could lead to significant tariffs starting at 25% on semiconductors, with potential increases over time.

Section 232 of the Trade Expansion Act of 1962 empowers the U.S. president to impose tariffs or other trade restrictions if imports are determined to threaten national security. This authority bypasses Congress, allowing the president to act based on recommendations from the Department of Commerce following an investigation. These investigations assess whether specific imports harm national security due to factors such as economic dependence or supply chain vulnerabilities. If a threat is identified, the president can adjust imports through measures like tariffs or quotas.

This strategic move would have broad implications for global semiconductor supply chains, particularly affecting key players in East Asia, including Taiwan, South Korea, Japan, and Malaysia—as well as China, the world's largest consumer of semiconductors. US technology companies reliant on chip imports will also face significant challenges from such measures.

The Persistent Cyber Dimension

While less visible than tariffs or regulatory barriers, cyber-enabled economic statecraft remains a critical component of China's strategic toolkit. The "Thousand Grains of Sand" approach facilitates industrial espionage targeting US technology firms, particularly those developing alternatives to Chinese manufacturing or working on advanced semiconductor technologies.

The Ministry of State Security and affiliated proxy organizations maintain sophisticated capabilities to acquire intellectual property and trade secrets, providing asymmetric advantages that bypass conventional trade barriers entirely. This cyber dimension creates a persistent background threat to US technological innovation even as more visible economic measures dominate headlines.

Semiconductor Sovereignty as Strategic Imperative

The current trade war disputes only underscore the centrality of semiconductor technology in contemporary geopolitical competition. Both nations recognize that leadership in microelectronics constitutes a fundamental pillar of national power in the 21st century, making this sector the focal point of unrestricted competition.

As this evolving techno-economic competition intensifies, understanding China's multidimensional approach becomes increasingly vital. Beijing's response extends far beyond conventional economic countermeasures, incorporating elements of regulatory warfare, strategic positioning in global markets, and targeted pressure on politically sensitive industries that reflect its comprehensive national strategy of "winning without fighting."