Trend US and Chinese extraterritorial controls push third countries to take sides

Summary

Rather than only targeting each other directly, Washington and Beijing increasingly regulate what third countries produce abroad and re-export. The US applies controls to equipment and technology through rules such as the Foreign Direct Product Rule, while China now does the same for critical minerals and rare earth technologies. Pressure on third parties has already spread beyond semiconductors to batteries, rare earths, AI and shipbuilding. The report expects the pattern to widen further into strategic industries and emerging technologies in general. For an economy closely tied to both powers, this means more frequent situations in which Korean firms are pushed to take sides on specific issues.