In May 2023, China announced new trade rules that alarmed US businesses and analysts, potentially undermining American efforts to reduce dependence on Chinese supply chains. The regulations, which could penalize foreign companies for shifting their sourcing, were unveiled just weeks before a scheduled summit between President Donald Trump and Chinese leader Xi Jinping on May 14-15. The Trump administration's response has been notably subdued, with officials refraining from public comments, which some experts interpret as a sign of weakness. The American Chamber of Commerce in China indicated that these measures could lead to reduced purchases from foreign firms without significant consequences for China. Additionally, the rules may allow Chinese authorities to investigate companies that attempt to lessen their reliance on Chinese goods. Analysts caution that if left unaddressed, these developments could normalize supply chain coercion and strengthen China's economic leverage over foreign businesses. The upcoming summit may influence the US response to these new regulations.