US China Trade Monthly - July 2026

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Multinational companies face mounting compliance challenges as the United States and China pursue increasingly divergent regulatory objectives through overlapping trade policies, export controls, and enforcement mechanisms. Recent developments—including China's new counter-extraterritoriality regulations and the Trump Administration's enhanced customs enforcement strategy—create direct legal conflicts that require businesses to navigate competing governmental expectations simultaneously. How sho

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The latest developments in China trade policy underscore a familiar but increasingly difficult reality for multinational companies: compliance risk is no longer confined to tariffs, export controls, or customs enforcement in isolation. Instead, companies operating across the United States, China, and third-country markets are being asked to navigate overlapping—and at times directly conflicting—regulatory regimes, industrial policy priorities, and enforcement expectations.

This issue brings together several recent developments that reflect that broader shift. China’s three recent regulations point to a more assertive regulatory posture designed to protect Chinese companies and respond to perceived foreign trade discriminations. In so doing, they create potential conflict-of-laws risks for multinational companies. On the US side, the latest Section 301 activity and the Trump Administration’s new customs enforcement strategy signal a renewed emphasis on import compliance, forced labor enforcement, and supply-chain accountability.

Taken together, these developments show that US and China-related trade compliance is becoming more strategic, more political, and more operationally demanding. Businesses must assess not only whether a particular transaction complies with applicable law, but also how sourcing decisions, investment structures, customs practices, and internal controls may be viewed by multiple governments pursuing increasingly divergent objectives.

We hope this issue provides a useful guide to the key legal and policy developments shaping China trade today, and to the practical steps companies should consider as they prepare for closer scrutiny on both sides of the Pacific.

China Expands Its Playbook: New Industrial Supply Chain and Counter-Extraterritoriality Regulations Create Direct Compliance Conflicts for Multinationals

On April 13, 2026, China issued the Regulations on Countering Improper Extraterritorial Jurisdiction by Foreign States (the “Extraterritorial Jurisdiction Regulations”), following the April 7, 2026 release of the Regulations on Industrial and Supply Chain Security (the “Supply Chain Regulations”) (together, the “Regulations”). Both took effect immediately, with no grace period or transition arrangements.

Trump’s China Visit Will Likely Extend Trade Truce, While Points of Friction Remain

President Donald Trump led a formal state visit to China from May 13-15, the first such presidential visit since 2017. The US delegation included U.S. Trade Representative Jamieson Greer, Secretary of the Treasury Scott Bessent, Secretary of State Marco Rubio, Secretary of War Pete Hegseth, and a group of US CEOs.

China Issues New Outbound Investment Regulation

On June 1, 2026, the State Council of the People’s Republic of China (“PRC”) released the Regulation on Outbound Investment (the “Regulation”), the country’s first dedicated administrative regulation governing outbound investment at the State Council level.

USTR Makes Forced Labor Findings in Section 301 Investigation

On June 2, 2026, the Office of the U.S. Trade Representative (“USTR”) released its report on Section 301 investigations into whether 60 economies failed to impose and effectively enforce a prohibition on importing goods produced with forced labor (the “Report”).

Trump Administration Releases New Customs Enforcement Strategy

On June 3, 2026, President Donald Trump issued an Executive Order (the “EO”), Strengthening Customs Enforcement, directing the Department of Homeland Security (“DHS”) and US Customs and Border Protection (“CBP”) to implement sweeping changes to the US customs regulatory framework.

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