Beijing, Aug. 13 -- Facing another US tariff hike, Chinese President Xi Jinping is getting tougher with Washington instead of backing down.

Beijing fired what economists called a "warning shot" at Washington by letting its yuan currency weaken in response to President Donald Trump's latest threat of more punitive import duties on Sept. 1. Chinese buyers canceled multibillion-dollar purchases of US soybeans. Regulators are threatening to place American companies on an "unreliable entities" list that might face curbs on their operations.

Both sides have incentives to settle a trade war that is battering exporters on either side of the Pacific and threatening to tip the global economy into recession. But Xi's government is lashing out and ...