Chinese enterprises, such as Huawei, have been severely affected by sanctions. In 2019, Huawei’s inclusion on the Entity List prohibited any foreign company using US technology from supplying it without approval, severely disrupting its global supply chain. This article interprets the national security exceptions (GATT Article XXI) in the USChina trade conflict. Through a doctrinal analysis of key rulings (e.g., Russia – Traffic in Transit), it constructs a three-factor review framework based on essential security interests, necessity, and emergencies in international relations. This framework is then applied to a comparative case study of US and Chinese sanctions practices. The analysis finds that while US extraterritorial sanctions frequently fail the necessity test, China’s counter-sanctions align more closely with the exception’s traditional scope. The article argues that the proportionality principle is vital to prevent abuse. By applying nascent DSB jurisprudence to a major contemporary dispute, this study provides a balanced framework for assessing the WTO-consistency of sanctions and suggests reinforcing the MPIA to reconcile sovereignty with multilateralism.