US President Donald Trump’s landmark visit to China comes as the US-Iran war disrupts global energy supplies, fuels economic uncertainty and adds fresh strain to Washington-Beijing ties. In the latest instalment of a series examining how rivalry, interdependence and geopolitical crises are reshaping the relationship between the two powers, we explore the intensifying US-China legal arms race.
For years, global businesses have been struggling to navigate rising trade tensions between the United States and China. Now, they are bracing for a daunting new level of complication: an intensifying legal arms race between the two powers.
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Both Washington and Beijing have been racing to erect rival – and often conflicting – legal and regulatory regimes in recent months, as they seek to gain strategic leverage in their ongoing stand-off over a host of trade, technology and security issues.
But that is leaving companies from South Korea to the Netherlands – not to mention China and the US – trapped in what analysts described as an “impossible position”, unable to comply with one side’s mandates without violating the other’s.
A glimpse of this new reality came in early May, as Beijing for the first time invoked its “Blocking Rules” – a measure adopted in 2021 to counter “improper” foreign actions – to order companies not to comply with US sanctions against five Chinese oil refiners.
The move followed a wave of high-profile legal actions by the Chinese government in April: unwinding the Meta-Manus deal, issuing new security rules to defend China’s supply chains from foreign threats, and rolling out tougher regulations to counter the “unjustified” extraterritorial use of foreign laws.
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Meanwhile, across the Pacific, American authorities have imposed sanctions on a string of Chinese entities accused of maintaining trade links with Iran – including the five oil refiners that Beijing sought to protect last week.