Dan Harris noted that many companies are scrambling to diversify supply chains, but shifting production out of China is far more difficult than policymakers often assume.

Dan Harris warned that gray-market distribution networks can create significant legal exposure for companies moving high-value consumer products.

“Companies are very, very concerned about their people going to China. Why wouldn’t they be?

The revised legislation expands protected information to include all “documents, data, materials or items related to national security” from simply “state secrets and intelligence” beforehand. It didn’t elaborate on what sort of materials would fall within the scope of these revised provisions.

“The key terms are not defined and are so vague,” said Dan Harris, partner at Harris Sliwoski, a law firm that advises on investments in China. “The old law basically covered state secrets and now it covers national interests.”

Trade lawyers are closely following Bedford’s case, including Adams Lee in Harris Sliwoski’s international-trade practice, who says: “This currency manipulation subsidy is definitely more interesting than the twist-tie case itself.”

“They’re going after these people not because of a business dispute in China. They’re going after these people because they violated Chinese criminal law,” said Mr. Harris. “They’re not only doing an end-run around the State Department and the DOJ. They’re really doing an end-run around U.S. law.”