China ramps up economic pressure on the US with rare earth and supply chain laws

New rules could target firms moving supply chains

China is tightening economic pressure tools aimed at the United States, setting new laws to punish foreign companies shifting supply chains. It has also tightened rare earth licensing and banned foreign AI chips, moves analysts view as direct responses to US policies. The strategy signals Beijing’s intent to protect its leverage ahead of high-stakes diplomacy, including the Trump–Xi summit.