China Strikes Back in Growing Tech War With Washington

BEIJING — The announcement came on an overcast September morning, delivered not with fanfare but with the clipped precision of a government communiqué: China’s Ministry of Commerce would launch an “anti-discrimination investigation” into American tariffs, export controls and restrictions on its semiconductor industry.

For most Beijingers, the language was familiar — yet the mood felt different. At a café near Zhongguancun, the capital’s technology hub, a young engineer named Liu Jun scrolled through the news on his phone. “They’ve been trying to choke us for years,” he said, gesturing at the headline. “This is the first time it feels like we are hitting back.”

Years of pressure

Washington’s campaign has stretched across administrations. In 2018, President Donald J. Trump imposed tariffs on hundreds of billions of dollars of Chinese goods, including chips. By 2022, the Biden administration had barred exports of the most advanced semiconductors and the machines needed to make them. More companies landed on the Commerce Department’s “entity list,” cutting them off from American suppliers.

The restrictions deepened in 2023 and 2024: new bans on high-bandwidth memory, chip design software and 24 types of manufacturing equipment. In September this year, the U.S. revoked “fast-track” export status for Taiwan Semiconductor Manufacturing Company’s plant in Nanjing, meaning every shipment would now need approval.

The moves were cast in Washington as matters of national security. But in Beijing, they were seen as part of a deliberate strategy to stall China’s technological rise.

The counter-move

China’s investigation, launched on Sept. 13, bundles these actions into one case. Officials said it would last three months, extendable if necessary. Under China’s Foreign Trade Law, they framed it as a matter of fairness: the United States was using discrimination to hobble Chinese firms.

The probe provides legal cover for countermeasures. Within days, Beijing placed six American companies on its “unreliable entity” list, limiting their access to the Chinese market. Regulators also opened an antitrust case against Nvidia, the Silicon Valley firm whose graphics processors dominate the global AI sector.

“This is not about one company or one sector,” said Zhang Wei, a trade lawyer in Beijing. “It is about sending a message: China will not accept rules written unilaterally in Washington.”

Limited remedies, deeper rifts

China’s case is uneven. The strongest legal footing lies in tariffs, which World Trade Organization panels have already judged inconsistent with U.S. commitments. But the enforcement system has stalled: the United States has blocked appointments to the WTO’s appellate body, leaving rulings unenforced.

Export controls are another matter. American officials will argue they fall under the WTO’s national security exception, a defense panels have historically avoided challenging.

“Beijing knows it can’t make the U.S. reverse its chip bans,” said Henry Lee, a technology analyst at a Shanghai consultancy. “The point is to shift the narrative — from China as a victim to China as an active player.”

In the capital, a new tone

On the streets of Beijing, the official rhetoric is being absorbed into daily life. Outside an electronics mall in Haidian district, a shopkeeper named Chen Yan shrugged when asked about the probe. “We’ve been squeezed for so long. Customers ask for Nvidia cards, and I have to tell them: not available. Maybe now America will see we won’t just sit quietly.”

At a university campus nearby, graduate students studying semiconductor engineering expressed a mix of frustration and defiance. “Yes, it hurts,” said one. “But it also forces us to innovate faster. Every ban has made us work harder.”

A hardening divide

The broader effect is clear: the semiconductor supply chain is splitting. U.S. firms are reassessing their China operations, fearing regulatory reprisals. Chinese companies are pouring money into domestic substitutes and suppliers outside Washington’s reach.

The investigation itself will not resolve the standoff. But it marks a shift in tone — a willingness by Beijing to escalate, not just absorb.

“The chip war is not ending,” said Zhang, the trade lawyer. “But the balance is changing. China is not only defending itself. It is striking back.”