China imposes countermeasures on US companies and organizations

China's Ministry of Commerce has banned domestic organizations and individuals from doing business with seven US entities, tightened export controls on drones and related technology destined for the United States, and limited the participation of US agencies in mandatory inspections of Chinese factories as part of the certification process.

Beijing said the measures were a response to recent US restrictions affecting Chinese telecom operators, testing laboratories, drones, consumer routers, undersea cables, advanced robotics equipment and power inverters, Reuters reports.

China also recalled that Washington last week added more than 40 Chinese entities to the list under the Uyghur Forced Labor Prevention Act.

The announcement also came after Reuters reported that President Donald Trump's administration was preparing a national security measure that would ban the import of new models of Chinese data center components into the US, including optical transceivers.

“This is a retaliatory measure and hardly a surprise,” said Alfredo Montufar-Helu, CEO of Beijing-based Ankura China. “Beijing has been developing its arsenal of countermeasures in recent months.”

The moves represent the latest escalation in trade and technology tensions between the United States and China. Washington is tightening restrictions on Chinese access to American technology and markets, while Beijing is responding with export restrictions and sanctions against selected American entities.

Business restrictions

China has placed Compliance Testing LLC, based in Mesa, Arizona, on a countermeasures list, banning Chinese organizations and individuals from doing business or cooperating with it.

Beijing said the testing and certification company aided and abetted recent anti-China measures by the US Federal Communications Commission (FCC), which it said had undermined the legitimate rights and interests of Chinese companies, without providing further details.

The FCC in April adopted an expedited process for verifying devices tested in laboratories in the United States or countries that have reciprocal agreements with Washington. At the same time, it proposed to stop recognizing testing laboratories and certification bodies in countries that do not have such arrangements with the United States.

If the proposal is ultimately adopted, it could make it more difficult for laboratories and certification bodies based in China to help manufacturers obtain FCC approval for devices sold in the United States.

China separately imposed the same business ban on companies and organizations Applied DNA Sciences, Stratum Reservoir, Altana Technologies, Responsible Business Alliance, Verité Group and Human Rights in China, accusing them of supporting US sanctions related to the Xinjiang region.

Several of them deal with supply chain monitoring, labor risk assessment, or human rights advocacy. The orders do not mention asset freezes or travel bans.

Drones, certification and printer investigation

China said controlled drones, key components and related technology destined for the United States would be subject to stricter individual screening, without a simplified licensing process. The measure does not constitute a complete ban, but could delay shipments covered by China's dual-use export control rules.

Beijing has also suspended the ability for U.S.-based agencies to conduct follow-up inspections of factories under China's mandatory certification system, which could increase costs and cause delays for manufacturers.

Separately, China has launched a national security investigation into imported printing, copying and office equipment.

The investigation does not mention the US or specific companies, but the Department of Commerce explicitly included it among its responses to recent US moves.

Montufar-Helu said the wording used by Beijing indicates dissatisfaction with recent US moves, which China considers incompatible with bilateral agreements.

"Both Beijing and Washington continue to resort to measured, targeted measures, rather than comprehensive ones," he said, assessing that neither side wants tensions to spiral out of control.