In response to a series of US trade restrictions imposed during a politically charged election season, the Chinese government has adopted a measured approach under President Xi Jinping. President Biden’s implementation of symbolic measures, such as tariffs on metals scarcely exported to the US by China, has facilitated this restraint.
China is likely to prevent the sale of TikTok to an American entity. President Biden’s signing of legislation potentially banning TikTok from the US market has prompted Beijing to consider retaliation. The government has directed reporters to previous statements vowing to safeguard its interests.
While China has shown restraint in responding to US trade curbs, driving TikTok out of the US could challenge this calibration. American firms with significant exposure to China’s market, including Apple and Tesla, may face retaliation. However, China is unlikely to inflict harm on its own economy amid a property crisis and weak domestic demand.
Beijing’s actions will also consider potential damage to foreign investment in China. Xi’s efforts to attract American CEOs and boost sentiment may be undermined by sanctions on US companies. While China has less-documented weapons at its disposal, such as restricting US access to its economy, alienating foreign firms in the tech sector could hinder China’s development.