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Khushboo Razdan

In 2025, even as US President Donald Trump sought to stabilise trade ties with Beijing, two Republican-led states were moving in the opposite direction, securing nearly US$50 billion in federal lawsuits for what they say was economic damage caused by China’s deliberate stripping of US hospitals and businesses of essential Covid-19 supplies.
Using a new reading of the “commercial activity” exception to a 50-year-old US law that generally blocks lawsuits against foreign governments, a federal court awarded Missouri US$24 billion in March, saying China’s early-pandemic hoarding of masks and gloves was market behaviour, not a sovereign act.
In November, a federal judge in Mississippi issued a similar US$25 billion judgment based on antitrust and consumer protection claims.
But the year ended with neither state collecting a dime. And what began as a courtroom strategy to hold China accountable has instead morphed into a high-stakes diplomatic tightrope.
Experts say that while attorneys general in both states have vowed to seize Chinese assets, the process is riddled with complex legal barriers that make execution virtually impossible and the dispute has escalated.


With Beijing filing a retaliatory lawsuit in Wuhan, the US State Department has found itself caught in the middle, quietly working to avoid triggering another round of trade tensions as Trump plans his trip to China in April.
William Dodge, an expert in international law at George Washington University’s law school, said that while China has refused to participate in the case, the only remaining option for the states is to serve the judgment on China through diplomatic channels.
“This means Missouri sends the judgment to the State Department. The State Department sends it to the US Embassy in Beijing, and the US Embassy delivers it to the Chinese foreign ministry,” he added.
Describing them as “necessary steps”, Dodge stressed that once the verdict is served, only then can Missouri attempt to enforce the judgment.
“But so far as I know, the US government would not be involved in the process for enforcing a judgment against assets that do not involve the State Department or the US government because they are not involved in the case,” Dodge explained.
The US State Department declined to comment on whether it is assisting the states with enforcement.
China describes US lawsuits as ‘purely malicious litigation’
In a statement to the Post, China’s embassy in Washington described the lawsuits as “purely malicious litigation and political manipulation with extremely sinister intentions”.
Embassy spokesman Liu Pengyu said that “the epidemic prevention and control policies and measures adopted by Chinese governments at all levels fall under the realm of sovereign acts and are not subject to the jurisdiction of US courts”.
Without answering whether the US State Department had been in touch regarding the lawsuits, Pengyu said that China will not accept “any so-called default judgments”, demanding the US side to “return to rationality and correct its mistakes”.
Still, experts warn that if the two states manage to persuade US courts to target Chinese-owned businesses or assets within their borders, the implications could extend far beyond Missouri or Mississippi, potentially opening the door for Beijing to retaliate against American firms anywhere on its soil.
To sue a foreign country, one usually must overcome the Foreign Sovereign Immunities Act (FSIA), which shields governments from US lawsuits.




US District Judge Stephen Limbaugh initially dismissed Missouri’s lawsuit in 2022, ruling that the state could not sue China.
But both Missouri and Mississippi advanced a different legal theory, arguing that when China swept up global supplies of personal protective equipment in early 2020, it was downplaying the severity of the virus.
By framing it as predatory market behaviour, the states sought to circumvent the FSIA.
In Missouri, Limbaugh accepted the state’s evidence of US$8 billion in economic damages and applied “treble damages” – multiplying by three – under antitrust law.
In Mississippi, a district judge accepted the state’s calculation that China hoarded exactly 20,836,254 items of PPE. The court fined China US$1,000 per violation, plus damages for the economic impact of more than 4,000 deaths, totalling US$25 billion.
The judge in Missouri also added a 3.91 per cent interest until the judgment is paid.
US lawsuits a clear violation of China’s sovereignty, maintains Beijing
In both cases, China refused to hire lawyers or appear in court, viewing the proceedings as a violation of its sovereignty. This led to an automatic “default judgment” in favour of the states.
The two lawsuits name the Chinese government, the Communist Party of China, several national agencies, provincial and local governments around Wuhan, and the Wuhan Institute of Virology.
Andrew Bailey, who served as Missouri’s Attorney General (AG) until September 2025, said in March that China’s refusal to show up to court didn’t “mean they get away with causing untold suffering and economic devastation”.
“We intend to collect every penny by seizing Chinese-owned assets, including Missouri farmland,” he said.
Specifically, the AG’s office identified around 42,000 acres of agricultural land in northern Missouri currently owned by Smithfield Foods, a subsidiary of the Chinese giant WH Group.
While the company has operated in the state for years, state officials argue that, because WH Group is a Chinese entity, its assets could be subject to the enforcement of the judgment.

However, Dodge said that “it’s possible to have a case in which a foreign state can be sued, but if you have a judgment, the judgment still can’t be enforced” due to a second protective shield called “execution immunity”.
“With respect to foreign states, the only property that is not immune from execution is property that is in the US that is used for a commercial activity, and that is used for the commercial activity on which the claim was based,” he noted.
Consequently, Dodge asserted that Chinese-owned property in the US is immune from litigation unless it was explicitly used to hoard personal protective equipment.
According to Chimene Keitner, who served as the Counsellor on International Law in the US Department of State from 2016 to 2017, a Chinese government-owned company’s property is also “not generally available to satisfy a judgment against China”.
She pointed out that only the Wuhan Institute of Virology and the Chinese Academy of Sciences face judgments against them.
“So only their property could be targeted, and only if those defendants are engaged in commercial activities in the United States. If a company wasn’t a defendant in the Missouri lawsuit, its property is not subject to seizure,” Keitner said.
Beijing’s response was swift and severe. Last month, the Intermediate People’s Court of Wuhan accepted a retaliatory lawsuit filed by the Chinese government against the State of Missouri, demanding US$50.5 billion in damages for “reputational harm” and defamation.
The suit explicitly names Catherine Hanaway, who succeeded Bailey as Attorney General, as a defendant, threatening to seize their personal assets if the state proceeds.
Hanaway responded with defiance to the development, saying: “We stand undeterred in our mission to collect on our US$24 billion judgment that was lawfully handed down in federal court. Their threats of ‘reciprocal countermeasures’ are simply an admission of guilt.”


Yet legal scholars say Beijing’s move is less about collecting damages than about signalling how far the dispute could spiral – and how quickly legal brinkmanship could turn into a broader geopolitical confrontation.
Keitner, who’s now at the University of California, Davis, described China’s reciprocal lawsuit “far-fetched”, but added that “under international law, there is a defence called ‘countermeasures’ that lets one country do certain things it couldn’t otherwise do as a way of pressuring another country to comply with international law”.
“So if Missouri violates China’s sovereign immunity, China could have a good argument for doing the same thing not just against Missouri, but against the United States as a whole,” she warned.
Dodge pointed out that the Chinese law also has a “reciprocity provision”, which says that if a foreign state, “like the United States, does not afford the same immunity to China that is provided in China’s law, then China can provide correspondingly less immunity to the foreign state”.
Threat of assets being seized on both sides increases deadlock
He said that if Missouri can convince a US court to disregard the immunity or seize Chinese-owned farmland in the state, “China could start seizing US-owned assets, not just Missouri-owned assets, but any US-owned assets in China to satisfy a judgment that it has”.
Keitner contended that it was unlikely that Missouri would appear in a Chinese court.
“So we’ll likely end up with a default judgment there too,” she explained.
“There also seems to be little chance of an apology from Missouri. Unfortunately, this all seems to be a lot of unhelpful political theatre, with no clear off-ramp for either side to save face.”

Dodge, however, challenged the premise that stockpiling supplies during a crisis constitutes a commercial crime, warning that such a precedent could backfire on the US.
“They [kept] personal protective equipment for people in China and did not sell that personal protective equipment to the rest of the world” Dodge said.
“Of course, that’s what any government would do when faced with a pandemic. It’s what the United States did with respect to Covid vaccines.
“So if we start going down the road of saying to governments, ‘if you don’t share your resources broadly, you’re liable to suit’, I think just about every government in the world could be sued.”


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Unpaid billions of dollars in judgments against China sucks US State Department into escalating legal dispute, but Beijing remains defiant


Unpaid billions of dollars in judgments against China sucks US State Department into escalating legal dispute, but Beijing remains defiant.


Trump-Xi diplomacy put to test thanks to tit-for-tat Covid lawsuits

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Unpaid billions of dollars in judgments against China sucks US State Department into escalating legal dispute, but Beijing remains defiant

Unpaid billions of dollars in judgments against China sucks US State Department into escalating legal dispute, but Beijing remains defiant