1. Introduction

Since 2017, U.S.–China economic and trade relations have shifted from a “ballast of cooperation” to systematic institutional competition—intensifying further under the “Trump 2.0” New Deal launched in 2025. This administration has deeply institutionalized national security in trade policy by deploying reciprocal tariffs, export controls, CFIUS reviews, longarm jurisdiction, and the Unreliable Entity List. These tools form a domesticlaw containment regime, targeting strategic sectors including semiconductors, AI, new energy, and critical minerals. This evolution marks a shift from conventional tariff disputes to a full-blown “legal war,” where law becomes a strategic weapon of great-power competition.China has responded robustly: enacting the AntiForeign Sanctions Law and Export Control Law, lodging WTO complaints, and intensifying legislative countermeasures. These moves underscore the clash over technological sovereignty and institutional discourse power. The U.S.'s aggressive stance—evident in revoking visas for Chinese students and challenging the legality of tariffs in the U.S. Court of International Trade—reflects a broader politicization of law as an instrument of geopolitical strategy.

Utilizing both case-based and normative methodologies, the study examines legal tools such as reciprocal tariffs, export controls, and entity blacklists to assess their compliance with international law and WTO norms. Emerging academic literature—including analyses of S&T decoupling, AI arms race, and evolving rules around critical minerals—provides a real-time intellectual backdrop. Ultimately, we argue that Trump’s “lawfare” is driven by power preservation, electoral politics, and geopolitical rivalry; that many U.S. measures violate international legal principles; that China’s countermeasures carry legitimacy under sovereignty and self-defense; and that this legal conflict is fracturing global order and ushering a shift toward power-based rule. The paper concludes by proposing institutional innovation, rule shaping, and regional cooperation as strategic responses for China to reclaim rule-making influence and navigate a fragmented global legal landscape.

2. China-US economic and trade “legal war” specific manifestations and logical motives

The US-China economic and trade “legal war” under the Trump 2.0 New Deal is a typical manifestation of the US intervening in the international economic and trade order and containing China’s development with the help of domestic law tools. The logic of this “legal war” is presented through specific strategic performance, and behind it are multiple motives driven by the international, domestic and institutional levels. This part will analyze it in depth by combining relevant literature and data.

2.1. Specific manifestations of U.S. legal measures

Since 2025, the U.S. has deployed a range of legal tools—reciprocal tariffs, export controls, CFIUS reviews, long-arm jurisdiction, and the Entity List—to exclude Chinese firms from critical sectors (semiconductors, AI, new energy, and strategic minerals) and reconstruct a U.S.-centered technology alliance. By invoking “national security,” the administration negates WTO multilateralism and substitutes it with a self-styled “U.S. rule-based international order,” thereby weakening international‐law authority and accelerating legal fragmentation.

At the narrative level, U.S. policymakers manipulate public opinion—portraying China’s advancements in 5G and AI as threats to “fair competition”—and invoke ambiguous provisions of the UN Charter or domestic statutes such as the International Emergency Economic Powers Act (IEEPA) to cloak sanctions in legal legitimacy [1]. This media strategy labels unilateral measures as “defending free trade,” while simultaneously shaping international investment provisions to facilitate long-arm jurisdiction and technology blockades.

Science and technology sanctions have been elevated into institutional weapons. For instance, a Section 301 investigation under the Trade Act of 1974 enabled the Department of Commerce to blockade China’s maritime and shipbuilding high-tech industries, leveraging “voluntary declarations” and “presumptive vetoes” to broaden sanction scope [2]. Concurrently, CFIUS reviews grant broad discretion for blocking Chinese investments, and recent U.S. court rulings have upheld long-arm jurisdiction over Chinese companies. These measures are at once covert—embedded in judicial processes—and coercive: the CHIPS & Science Act’s subsidies prompted a 32 percent surge in U.S. semiconductor investment in early 2025, distorting global supply chains by imposing U.S. industrial policy as a de‐facto international standard. Together, courts and administrative agencies break the boundaries of domestic law, embedding “U.S. standards” into global governance and extending American legal hegemony into technology sectors.

2.2. Analysis of motivation​

Taking interdisciplinary methodology as the core, this chapter combines the theory of international relations (power competition and hegemony) with the basic principles of international law (sovereign equality of states, non-interference in internal affairs, and peaceful settlement of disputes) to systematically deconstruct the driving logic of the legalization of U.S. economic and trade measures against China and to reveal its structural impact on the order of international law.

2.2.1. International relations perspective

In the field of international relations theory, Offensive Realism, Institutional Hegemony Theory and Hegemony Protection Theory together constitute the triple perspective of theoretical analysis.

Offensive Realism was put forward by John J. Mearsheimer, who believed that the best way for great powers to survive in a state of anarchy is to compete for hegemony through foreign expansion, and that in order to maintain its dominant position, the hegemonic power is bound to adopt a strategy of containment against potential challengers [3]. Mearsheimer’s theory reveals the deep-seated anxiety of the United States about the “Thucydides Trap”: the essence of the legal war is a tool to protect power, aiming to eliminate China’s challenge to the established international power pattern through institutional suppression.Moreover, Institutional Hegemony Theory (IHT) complements this explanation from another dimension. According to Robert O. Keohane, a hegemonic state creates and dominates the international system, transforms its power advantage into binding rules, and thus maintains its influence even after the relative decline of hegemony [4]. This theory suggests that the “legalization” of US economic and trade disputes with China is not purely economic competition, but rather the maintenance of its institutional hegemony through the reconstruction of rules. The U.S. has upgraded the Sino-U.S. game to a systematic struggle for institutional power through the suppression of "hard power" and the shaping of “soft rules” against China. This is not only a realistic need for power protection, but also a long-term game of rule dominance.

2.2.2. International law principles

According to Article 2(1) of the UN Charter demands respect for each state’s sovereignty and prohibits economic coercion [5]. Through IEEPA’s long-arm jurisdiction—e.g., restricting TSMC’s chip sales to Huawei—the U.S. extraterritorially enforces domestic law, violating the Declaration on Principles of International Law regarding sovereign equality [6]. Likewise, Section 301 tariffs ignore the WTO’s Most-Favored-Nation obligation (GATT Article 1), treating China differently from other members and undermining equal trade treatment [7].

From the perspective of Non-Interference in Internal Affairs, UN Charter Article 2(7) prohibits interventions in matters within a state’s domestic jurisdiction. By embargoing SMIC’s 7 nm photolithography machines through the CHIPS & Science Act and blacklisting Changjiang Storage under export controls, the U.S. intrudes directly on China’s industrial and technological sovereignty—undermining Article 2 of the UN Charter’s emphasis on free economic choice and Article 34 of the Vienna Convention on Treaties, which bars imposing treaty obligations on third states (e.g., USMCA’s “poison pill” clause) [8,9] Then, Peaceful Settlement of Disputes, The UN Charter (Article 33) and WTO DSU mandate peaceful resolution via consultation and arbitration [10]. Domestically, invoking laws like the Foreign Corrupt Practices Act against Chinese firms in third countries creates a “domestic justice over international rule-of-law” double standard, flouting Article 38 of the ICJ Statute (which prioritizes justice and international law) [11]. In essence, the U.S. has orchestrated a systematic deconstruction of international legal principles under the banner of “rule reconstruction.” By undermining the UN Charter’s normative framework and deviating from WTO multilateral values, this “legal war” elevates U.S. domestic law above established global norms—exacerbating rule fragmentation and precipitating a shift from a genuinely rule-based order to one centered on power.

3. Proof of wrongfulness of U.S. unilateral sanctions

3.1. Violations of international treaty rules

Although no treaty expressly bans all unilateral sanctions, U.S. measures against China contravene multiple binding obligations:

First, trade sanctions under Section 301 of the Trade Act of 1974 conflict directly with WTO rules. In DS543 (China v. U.S. 301 Tariffs, 2019), the WTO panel held that U.S. tariffs on Chinese exports breached GATT Article I (Most‐Favored‐Nation) and Article II (Tariff Concessions). By imposing tariffs without recourse to the WTO Dispute Settlement Body (DSB), the United States bypassed the mandatory multilateral process and undermined the WTO framework.

Second, U.S. regional trade provisions—most notably the “poison pill” in USMCA Article 32.10—force member states to obtain U.S. approval before negotiating FTAs with “non-market economies.” This contravenes VCLT Article 34 (“A treaty does not create either obligations or rights for a third State without its consent”) by effectively coercing other states’ sovereign FTA decisions.

Third, asset-freezing practices infringe human rights and Security Council precedent. In Certain Iranian Assets (ICJ 2023), the Court determined that U.S. freezing of Iran’s central bank reserves exceeded “necessary measures” authorized under UN Charter Article 41 [12]. Similarly, the 2021 UN Human Rights Council report (A/HRC/48/56) found that U.S. sanctions on PDVSA assets amounted to “collective punishment,” violating the ICCPR’s guarantee of self-determination (Article 1) and the right to property (Article 12) [13].

Fourth, financial restrictions on Chinese banks—placing them on the SDN List and blocking U.S. dollar clearing—breach IMF Agreement Article VIII (Avoidance of Restrictions on Current Payments). The IMF’s 2022 Annual Report warned that such unilateral financial coercion undermines the global payments system [14]. Finally, aviation bans on Chinese carriers violate the Chicago Convention (Article 5), which guarantees non-discriminatory market access. ICAO Resolution A40-2 (2019) expressly discourages unilateral route restrictions and calls for multilateral consultation. By imposing these bans without ICAO engagement, the U.S. flouts established aviation law.

3.2. Breaches of general international law principles and systemic deficiencies

Beyond specific treaty breaches, U.S. sanctions erode two foundational norms and reveal deeper institutional shortcomings:

First, the principle of non-interference (UN Charter Article 2(7)) prohibits any state from intervening in matters “essentially within the domestic jurisdiction” of another. In Nicaragua v. United States (ICJ 1986, para. 245), the Court held that U.S. economic sanctions (trade embargo and financial blockade) violated this principle by coercing political change [15]. Likewise, the Chip & Science Act’s restrictions on China’s semiconductor firms (e.g., embargoing SMIC’s 7 nm equipment) intrude directly on China’s industrial policymaking, contravening Article 2 of the UN Charter’s Economic Rights and Duties of States (freedom to choose economic systems) [16]. China’s reciprocal cybersecurity review of Micron Technology under its Anti-Foreign Sanctions Act (2023) therefore constitutes a lawful countermeasure to uphold non-interference [17].

Second, the principle of peaceful dispute settlement (UN Charter Article 33; WTO DSU) mandates consultation and arbitration before retaliation. U.S. imposition of $34 billion in Section 301 tariffs (2018) predated any DSB ruling, violating DSU Article 23’s prohibition on unilateral retaliation (DS543, para. 7.116). Further, by blocking WTO Appellate Body appointments, the United States has effectively paralyzed the dispute resolution mechanism [18]. Concurrently, invoking the Foreign Corrupt Practices Act to fine Chinese firms (e.g., ZTE fined $1.7 billion in 2022) exemplifies a “domestic justice over international rule-of-law” double standard, contravening ICJ Statute Article 38, which prioritizes international law.Moreover, these breaches expose institutional deficiencies in the international legal system. Customary international law remains ambiguous regarding “self-help”: Oppenheim permits self-defense only if it does not conflict with jus cogens (non-intervention) [19]. The U.S. has abused this uncertainty—freezing Iranian assets under “counter-terrorism” without clear evidence—reducing sanctions to tools of political coercion. Likewise, UN Charter Article 41 authorizes Security Council sanctions but is silent on unilateral measures. The U.S. exploited that gap by reimposing “extreme pressure” on Iran after UNSC Resolution 2231 (2015) lifted U.N. sanctions, thus undermining Council authority [20]. Finally, ICJ judgments have been modest in scope: while Nicaragua (1986) recognized sanctions as interference, it stopped short of a categorical ban on non-forcible measures, leaving great-power “lawfare” in a persistent legality grey zone.

4. Analysis of the legitimacy of China’s countermeasures

4.1. Legitimacy of purpose

China’s counter-sanctions derive their legitimacy from the rule of self-help under the Vienna Convention on the Law of Treaties and customary international law principles governing countermeasures. Article 60 of the Vienna Convention requires that countermeasures respond only to “material breaches” and aim to restore legal equilibrium, rather than to punish. Article 3 of China’s Anti-Foreign Sanctions Law (AFSA) similarly authorizes measures against “acts of foreign countries in violation of international law,” such as U.S. long-arm jurisdiction or discriminatory trade restrictions targeting China. In practice, Chinese counter-sanctions have maintained a defensive posture [21]. For example, when the 2023 U.S. CHIPS & Science Act effectively embargoed China’s semiconductor industry, Beijing’s cybersecurity review of Micron Technology sought to induce compliance rather than to inflict purely economic harm—requesting that Micron rectify supply-chain issues rather than imposing open-ended restrictions. Such calibrations align with the Draft Sanctions Rules’ stipulation that counter-sanctions not be imposed for punitive purposes.

4.2. Reversibility and temporariness

Under international law, counter-sanctions must be reversible and limited in duration. The Draft Sanctions Rules emphasize that countermeasures “shall be terminated immediately upon cessation of the wrongful act.” China’s AFSA (Article 10) provides for sanctions to be “suspended, canceled or adjusted” considering changing circumstances, creating a dynamic review mechanism. For instance, China’s 2022 sanctions on Lockheed Martin explicitly expire “once it ceases arms sales to Taiwan,” underscoring temporariness. Procedural reversibility is also built into China’s system: Article 14 of the AFSA Implementation Provisions allows sanctioned parties to apply for delisting by correcting the offending conduct. In 2024, a European firm was removed from China’s sanctions roster after discontinuing participation in a disputed supply chain, demonstrating that measures can be lifted once compliance is achieved.

4.3. Proportionality of measures

The proportionality principle requires that countermeasures remain commensurate with the injury suffered. Article 6 of the Draft Sanctions Rules mandates “reciprocal and non-reciprocal measures” that satisfy proportionality. China has sought to uphold this in three ways:

4.3.1. Reciprocity within WTO bounds

When the U.S. imposed Section 301 tariffs on Chinese exports, China responded with WTO-compliant reciprocal tariffs. In DS543 (China v. U.S. 301 Tariffs), the WTO panel concluded that China’s measures “did not exceed the necessary limits” (WTO Panel Report, DS543, para. 7.118), affirming their proportionality.

4.3.2. Targeted precision

China limits its sanctions to those individuals or entities directly implicated in wrongful acts, avoiding “collateral punishment.” For example, 2023 visa restrictions targeted five U.S. officials responsible for sanction policy, without affecting their family members or unrelated associates.

4.3.3. Minimizing third-party harm

To prevent harm to uninvolved parties, China exempts humanitarian goods and essential supplies from asset freezes. In 2022, sanctions on a European pharmaceutical company specifically excluded transactions related to COVID-19 vaccines, aligning with international humanitarian law principles. The ICJ has affirmed in Gabčíkovo–Nagymaros (1997) that countermeasures exceeding what is necessary to restore balance are unlawful. China’s 2024 export restrictions on Micron Technology—limiting only certain semiconductor materials rather than imposing a blanket ban on technical cooperation—illustrate adherence to proportionality, targeting specific harms without broader disruption.

5. Case analysis of unilateral sanctions and countermeasures

5.1. U.S. unilateral sanctions under the “America first trade policy”

On January 20, 2025, the Trump 2.0 administration enacted the “America First Trade Policy,” directing nineteen agencies (including Commerce, Treasury, and USTR) to initiate twenty-three unilateral investigations by April 1 to justify “supplemental tariffs,” IEEPA‐based sanctions, and expanded technology embargoes in AI and quantum computing. By February 4, the U.S. imposed a 10 percent tariff on Chinese goods—escalating to 20 percent on March 3 under the pretext of fentanyl interdiction—and rescinded its “de minimis exemption,” causing a 30–40 percent spike in cross‐border e‐commerce costs. These measures contravene WTO obligations at multiple junctures: they violate GATT Article I (Most‐Favored‐Nation) by imposing discriminatory tariffs (e.g., 25 percent on Canadian and Mexican steel while applying higher rates to Chinese competitors without WTO authorization), abuse the Article XXI security exception (invoking “rare earth supply chain security” absent credible evidence, and bundling public health concerns to mask economic protectionism), and exceed permissible extraterritoriality by compelling third‐country firms that use ≥10 percent U.S. technology to secure U.S. export licenses—thereby breaching the sovereign equality principle under UN Charter Article 2(1). Moreover, recent UN GA resolutions have crystallized customary norms condemning unilateral embargoes, extraterritorial sanctions, and measures causing serious human‐rights harms; the U.S. “Preferred Trade Policy” directly contravenes these emerging norms.

In response, China requested consultations (DS623) under WTO Article 9, alleging GATT Article I violations, while domestic courts found Section 301 tariffs incompatible with GATT Article II (tariff bindings). MOFCOM imposed 15 percent reciprocal tariffs on U.S. wheat and corn under the Foreign Trade Law and tabbed the U.S. measures for WTO adjudication. Regionally, China leveraged RCEP Article 10.6 to foster “supply‐chain resilience” networks, diluting U.S. coercive leverage. Internationally, the U.S. conduct breaches GATT Articles II and XI (prohibiting quantitative restrictions) and subverts UN Charter Article 2(4) (prohibiting coercive force). By contrast, China’s counter‐tariffs align with the “necessity” exception in Article 22 of the ILC Articles on State Responsibility, permitting temporary derogations when fundamental security interests are imperiled. Ultimately, the “America First Trade Policy” exploits three legal loopholes—circumventing multilateral review under “national security,” imposing extraterritorial “global supplementary tariffs,” and leveraging U.S. dollar hegemony to amplify sanction effects—underscoring the imperative of WTO reform and expanded regional‐agreement networks to check unilateralism.

5.2. China’s countermeasures: Huawei and Xinjiang photovoltaic cases

China’s countermeasures have been anchored in UN Charter Article 2(7) (sovereign equality) and WTO disciplines, deploying a “four‐dimensional” toolbox—diplomatic protests, WTO litigation, domestic legislation, and calibrated reciprocity—to safeguard its economic and legal order.

In the Huawei case, Huawei’s placement on the U.S. Entity List (EAR) since 2019 prohibited U.S. companies from exporting goods containing ≥10 percent U.S. technology. In May 2020, the U.S. extended this embargo by requiring global foundries using U.S. technology to obtain U.S. government licenses before serving Huawei. Such measures contravene GATT Article I:1 (MFN) by targeting a single entity without WTO scrutiny and abuse GATT Article XXI, as the U.S. failed to demonstrate that Huawei’s products posed an “essential security” threat. Furthermore, these extraterritorial restrictions violate customary principles of territorial jurisdiction and international comity. In response, China requested WTO consultations—collaborating with the EU and Japan to advocate new “cross‐border data flow” rules—and supported Huawei’s constitutional challenge in U.S. federal court, disputing due process and arguing that extraterritorial jurisdiction exceeded executive authority. Domestically, China adopted the “Provisions on the List of Unreliable Entities,” instituted a national technology security review, and accelerated development of an autonomous industrial chain, thereby reducing dependence on U.S. semiconductor inputs.

In the Xinjiang photovoltaic (PV) case, the 2021 UFLPA imposed a “rebuttable presumption” that all Xinjiang‐origin PV silicon products were tainted by forced labor, demanding importers supply evidence “beyond a reasonable doubt.” [22] By selectively applying labor‐standards scrutiny—contravening ILO core conventions that do not mandate supply‐chain audits—these U.S. measures breached GATT Article XX’s “general exception” (necessity and non‐discrimination). Bundling human‐rights rhetoric with trade restrictions also conflicted with the Paris Agreement’s clean-energy objectives, undermining global public interest. In retaliation, China listed relevant U.S. entities under AFSA Article 3, froze their Chinese assets, and restricted entries of implicated personnel. Simultaneously, Xinjiang authorities launched a blockchain traceability platform (e.g., Hesheng Silicon) to establish full‐chain compliance and refute forced‐labor allegations. Regionally, China invoked RCEP “supply‐chain resilience” measures to forge alternative PV‐material networks. At the UN Human Rights Council, China cited the WTO Appellate Body’s findings in China–Raw Materials (DS516), urging multilateral norms over unilateral coercion—a position endorsed by the EU, ASEAN, and others [23].

Collectively, these cases illustrate three salient features of China’s strategy: (1) a robust legal toolbox combining diplomacy, WTO recourse, domestic statutes (AFSA and anti-extraterritoriality measures), and reciprocal sanctions; (2) a transition from reactive defense to proactive rule‐making, exemplified by China’s proposals on digital trade and supply‐chain security; and (3) multilateral synergy through Belt and Road, RCEP, and other frameworks to reconfigure global trade networks, undercut U.S. sanction efficacy, and preserve industrial stability. By invoking UN Charter Article 103 (priority of multilateral treaty obligations over conflicting unilateral measures), China not only defends its enterprises’ rights but also advances international legal development—shifting the global order from “power-oriented” diktats to rule-based governance.

6. Conclusion and outlook

The US–China “legal war” is reshaping international law and governance in real time, disrupting institutions while creating catalysts for transformation. Washington’s repeated use of unilateral sanctions and long‑arm jurisdiction has deeply shaken the WTO‑centered multilateral trading system, splintering international norms and undermining the authority of global institutions. Meanwhile, the absence of clear rules in emerging domains—especially the digital economy, artificial intelligence, and climate governance—has exposed severe rules void at a time of rapid technological progress.

However, this struggle has catalyzed global reflection and action. Nations are increasingly recognizing the deficiencies of a U.S.‑centric framework and are mobilizing toward a more equitable, inclusive governance model. Initiatives such as the UN’s “Pact for the Future,” which calls for digital cooperation and AI regulation, and the institutional momentum toward multilateral reform—with networked, plurilateral, and regional architectures—signal the emergence of a multipolar order better equipped to address 21st‑century challenges. The recent UN High-Level Advisory Body’s recommendations to establish an Intergovernmental Panel on AI further underscore the international imperative for shared governance of emerging technologies.The unfolding “legal war” is therefore both a test and an opportunity: a test of current institutions and a profound opportunity to redefine international order for a multipolar world in an era of technological fragmentation. The future of global governance will depend on whether states can transcend unilateralism, converge on common frameworks, and shape an inclusive legal architecture that addresses the interlinked challenges of data, AI, and climate.