Key Takeaways and Strategic Implications
In addition to the reactive nature of China’s export control regime, these case studies glean several other takeaways:
- Swift retaliation: Since the Standing Committee of the National People’s Congress enacted the PRC Export Control Law, China has swiftly imposed retaliatory export controls on key minerals and metals, often within just days of each initial U.S. action.
- Targeted versus broad controls: For the controls themselves, some specifically target the United States (e.g., controls on antimony, gallium, and germanium) and U.S. defense companies, whereas other controls have country-agnostic licensing regimes (e.g., controls on tungsten, tellurium, bismuth, molybdenum, and indium).
- Escalating and asymmetrical retaliation post-2025: Following the reelection of President Trump, China has demonstrated its willingness to strengthen its export controls when faced with blunt economic measures like across-the-board tariffs.
Assessing U.S. Vulnerabilities in a Tit-for-Tat Trade War
As the Trump administration looks to push on China’s economic chokepoints, it should carefully consider the ramifications of doing so. Both Washington and Beijing have asymmetric capabilities, and the United States has its own vulnerabilities which China can leverage. Even with artificial intelligence development—which has been the nucleus of U.S. export controls thus far—China has significant advantages. China benefits from its high-volume production of transformers, which are required for data centers, and from its market share of antimony, gallium, germanium, and indium, critical minerals necessary for semiconductors. These reciprocal dependencies should be a key factor as the United States conceives future export control strategies.
On a structural level, the expansion of U.S. export controls could result in China utilizing its nascent export control regime more proactively. Thus far, the United States has averted such a tripwire, but that would be stressed if Washington tries to cut Beijing off of U.S. legacy chips. In such a scenario, global trade would be reshuffled with both the United States and China rearranging global supply chains. Moreover, if Beijing were to proactively apply their controls, Washington would be caught on the backfoot, with limited ability for recourse.
Mitigating Risks and Enhancing Strategic Communication
To safeguard American economic interests while minimizing unnecessary escalation, the following actions should be considered:
- Conduct a cross-sectoral risk analysis. The Department of Commerce should lead an interagency assessment of U.S. vulnerabilities tied to Chinese-controlled production processes. While the previous administration laid groundwork with the Quadrennial Supply Chain Report, significant gaps remain—especially in critical minerals and medical supply chains. Such an assessment would provide a clearer understanding of potential risks of a Chinese reaction to future U.S. export controls, including disruptions in supply chains, loss of market access, or adverse impacts on critical industries. This analysis should also be used to inform allies and partners about the current risk present in the global economy and to develop scenario-based exercises of how escalating tension could ripple through the international supply chains.
- Establish formal communication channels with China. The State Department, in coordination with Commerce and Energy, should develop structured diplomatic engagement on export controls. While dialogue alone will not resolve tensions, proactive communication could help prevent unintended escalations and stabilize economic relations.
- Monitor China’s legal and regulatory shifts. Beyond trade controls, China is increasingly embedding economic security into its broader legal framework. Notably, during the 14th National People’s Congress, Beijing enacted The Law on Foreign Relations of the People’s Republic of China, aimed at countering foreign trade restrictions and sanctions. Understanding these evolving legal mechanisms is crucial for anticipating Beijing’s responses to future actions from Washington.
Navigating the Next Phase of U.S.-China Economic Rivalry
Since President Trump announced “reciprocal tariffs” on April 2, the United States and China have been inching toward an economic decoupling. Tit-for-tat responses have made way for targeted non-tariff rebuffs, including export controls. Disentanglement would ripple throughout third markets, leaving no countries unaffected. Despite the scale of this challenge, the offramps are shrinking and the tools of escalation are becoming more sophisticated.
As economic security takes center stage in both U.S. and Chinese foreign policies, the United States must navigate this evolving landscape with strategic foresight. A reactive approach risks deepening a cycle of retaliation that could disrupt global markets and weaken U.S. economic resilience. By incorporating a more nuanced assessment of vulnerabilities, maintaining open channels of communication, and preparing for shifts in Beijing’s legal system and regulatory strategies, Washington can craft a more balanced and effective export control strategy that safeguards national interests while avoiding unnecessary economic fallout.
Philip A. Luck is director of the Economics Program and Scholl Chair in International Business at the Center for Strategic and International Studies (CSIS) in Washington, D.C.
