China is putting American companies on the ropes in the country.

ShanghaiFor decades, US business lobbyists have pushed for China to open its doors to banks, aerospace companies, and fast-food chains. Aircraft manufacturer Boeing, for example, began receiving orders from the Asian giant shortly after a visit by Richard Nixon in 1972. But now, many American business owners in the country are seeing their own government dismantling much of the work they've done.

tariff war declared by Donald Trump makes their supply chains unsustainable, and Chinese government retaliation threatens to undo years of commercial success. On April 15, China's aviation regulator banned the country's airlines from importing Boeing planes, as Bloomberg publishedA symbolic move that will not go unnoticed by American executives in Shanghai or Beijing.

American companies in China are trying to figure out what the future will look like. Trump's tariffs on Chinese imports are already at 145%. And although the White House announced exemptions on several electronic devices on April 11—much to the relief of companies like Apple—the president said shortly afterward that this was a temporary measure, pending an investigation into semiconductors, electronics, and pharmaceuticals. The result will likely be high tariffs on products that use chips, such as cell phones.

Beijing has responded to the US escalation with 125% tariffs, but has made it clear that it will not respond with further tariffs because, once prices soared, the market for US imports has already disappeared. Likewise, Chinese regulators have launched investigations and placed US companies on lists that will harm their operations in the country. Companies like Boeing can expect a rapid drop in orders or cancellations. One US executive describes the trade war with one word: "Destruction."

Trump points to a trade deficit with China of around $300 billion by 2024 to justify the tariffs. But American executives in China see things differently. Last year's revenue for US-listed companies reporting sales in China was the same amount. Apple, Nike, and Starbucks are ubiquitous, and the electric car maker Tesla, owned by Elon Musk, sold about two-fifths of its vehicles to the Asian giant in the first three months of this year. Their companies employ tens of thousands of workers, often highly skilled. By contrast, Chinese companies in the US have been far less successful, with just $50 billion in revenue last year. Finding a Chinese consumer brand on the streets of an American city is certainly difficult.

Most US companies with complex supply chains are still recovering from the impact of the pandemic, during which many sought to limit their total dependence on Chinese manufacturing by locating in other countries in the region. This partial diversification may work against them as the trade war progresses. Vietnam, for example, has proposed halting the rerouting of Chinese products in exchange for Trump easing tariffs, according to Reuters. This means US companies operating between the two countries could face even higher tariffs.

US managers will also have to deal with the wrath of the Chinese state. Since 2019, regulators have developed a sophisticated legal framework that includes sanctions, export restrictions, and an "unreliable entities list" (UEL), which allows workers from certain companies to be barred from entering the country and prevented from doing business with China. While these three mechanisms were used 15 times in 2023, they were activated up to 115 times in 2024, according to an article by Evan S. Medeiros of Georgetown University and Andrew Polk of Trivium, a consulting firm. In the first two and a half months of 2025, they have already been used around sixty times.

The sectors in Beijing's sights

The new forms of retaliation are becoming increasingly clear. On April 8, an unofficial list of six measures began circulating on Chinese social media. Some are relatively straightforward, suggesting a ban on imports of US poultry and soybeans, as well as a suspension of all talks on controlling the fentanyl trade. Another suggested halting imports of US films. The list was written by two well-connected bloggers. Two days later, the film regulator announced it would reduce the number of US films allowed into China, demonstrating that the social media posts were based on reliable information.

So far, no attacks on US services in the country have fully materialized, potentially harming the ability of other US companies to operate. Law firms, banks, consulting firms, and accounting services are the backbone of commerce. China has already made it difficult for some of these services to operate. Corporate investigations, for example, have become riskier as regulators have tightened rules related to national security and the types of information that can be disclosed. Many law firms have already downsized or closed offices. If this pressure increases, says one Beijing lawyer, the ability to deal with Chinese companies will be hampered.

The Chinese government, in any case, will have to be careful when imposing punishments on American companies. Hurting Apple or Tesla will inevitably affect local manufacturing capacity and lead to layoffs. Sanctions could also scare off companies from other countries, which could harm the Communist Party's efforts to attract foreign investment. This scenario, on the other hand, may benefit some Chinese companies, especially if there is a backlash against American consumer products, whether driven by Beijing or by the citizens themselves. Tech giant Huawei, for example, could gain at Apple's expense.

The trade war, however, could turn out to be a gift for China's leaders. Local consumers adore American culture and products, and so far many have ignored the state's attempts to promote local brands. Trump's anger at China will make it easier for the Communist Party to purge the country of American brands and companies.