China can make its own play under global trade rules. Beijing can quickly demand binding arbitration — and could have a good chance of winning. China was allowed into the W.T.O. with very few limits on its ability to regulate services or foreign investment, two categories in which China was fairly weak when it entered the organization in 2001.
If China did win a W.T.O. case, it would then have the right to restrict American exports to the same extent that the United States restricts Chinese imports.
China consistently exports four times as much to the United States as it imports. Even so, China could penalize American companies like Apple and Starbucks that have very large operations that produce and sell in China with minimal imports from the United States.
“U.S. negotiators, I think, basically dropped the ball,” said Nicholas R. Lardy, a longtime trade expert at the Peterson Institute for International Economics, referring to the rules on services that were negotiated when China entered the W.T.O. “They didn’t think China was very important.”
-Keith Bradsher and Paul Mozur ‘As Washington Tries to Protect Tech, China Could Fight Back’ The New York Times