In a major escalation of a media war between Beijing and Washington, the Trump administration on Monday ordered four Chinese news outlets operating in the US to reduce the number of Chinese nationals working on their staff by more than a third.

The action comes on the heels of a State Department decision on 18 February requiring five Chinese news organisations considered organs of the government to register as foreign missions and provide the names of employees.

China responded by expelling three Beijing-based Wall Street Journal reporters, condemning as “racist” an essay that ran in the news outlet’s opinion section criticising China’s response to the coronavirus outbreak. US officials said that by 13 March, the Chinese news outlets can have no more than 100 Chinese citizens on staff, down from 160 currently employed by the five outlets.

The officials said it was an effort to bring “reciprocity” to the US-China relationship and to encourage the ruling Chinese Communist Party to show a greater commitment to a free press. They noted that only 75 American reporters are known to be working in China.

“As we have done in other areas of the US-China relationship, we seek to establish a long-overdue level playing field,” Mike Pompeo, the secretary of state, said in a statement. “It is our hope that this action will spur Beijing to adopt a more fair and reciprocal approach to US and other foreign press in China.

We urge the Chinese government to immediately uphold its international commitments to respect freedom of expression, including for members of the press.”

In announcing the move, senior administration officials cited the disappearance of citizen journalists chronicling the outbreak of the coronavirus in Wuhan. In a report by the Foreign Correspondents’ Club of China, called Control, Halt, Delete, 8 in 10 correspondents said they had encountered interference, harassment or violence while reporting and described the environment for journalists as deteriorating.

“We’re witnessing an assault on free speech inside of China that goes even beyond what it was a decade ago,” said an administration official, speaking on condition of anonymity under administration rules for briefing reporters.

Other officials sought to distinguish the US action from China’s expulsion of nine foreign reporters since 2013 when Xi Jingping ascended to power. The expulsions were usually attributed to the government’s unhappiness with news coverage. US officials said it will be up to the designated outlets to determine which employees to cut and said there will be no restrictions placed on their content or choice of what to cover. But they said they are considering imposing duration limits on Chinese nationals working for the outlets, similar to those used by Beijing on foreign correspondents.

The officials pointedly refused to refer to the affected employees as journalists, calling it an insult to free and independent reporters who are not working for “propaganda outlets”. Though they are not being expelled, many are in the country on I-visas issued to foreign media and may not be able to stay in the country if they lose their jobs.

The caps were imposed proportionately on four of the five designated outlets: Xinhua News Agency at 59, the China Global Television Network at 30, the parent company of the China Daily at nine and China Radio International at two. The fifth designated outlet, the distributor for the People’s Daily, was not capped, because it has no Chinese citizens working in the US.

All the outlets employ Americans as well as Chinese, so the caps will not eliminate their ability to cover news in the United States. But State Department officials refused to call the affected employees journalists, saying they work for propaganda outlets.

Officials said it will be up to the news organisations to determine which Chinese citizens to let go by the 13 March deadline. It is not clear how many will have to leave the country or when, because it depends on the type of visas they have.

The government in Beijing and the four outlets were notified of the restrictions Monday morning. US officials declined to speculate on how Beijing may respond but said if they retaliate against foreign reporters in Beijing, “all options are on the table”.

“Our goal is to get to a place where Beijing moves to a more accommodating posture towards journalists, including Americans,” a senior State Department official said.

An administration official said it would be “a shame” if Beijing retaliates against reporters working in China, predicting it could lead to a pullback of investor confidence in the country.

“American news outlets aren’t part of the US government,” the official said. “That’s the beauty of our system. They’re completely independent. It would be a shame if China decided it wanted to take things out on them.”

Every year, hundreds of Chinese citizens are granted visas allowing them to report in the US, though it was not immediately clear how many are currently working as reporters. The move against employees of China’s government-controlled media comes amid an escalating series of critical statements by Pompeo about Beijing.

He has repeatedly criticised the government’s maltreatment and detention of Muslim Uighurs, warned US allies of risks associated with technology from the Chinese company Huawei and castigated Beijing’s expanding economic influence in developing countries.

Pompeo has said Beijing is intent on international domination and during a January visit to London, he called the Chinese Communist Party “the central threat of our times”.

Now, as the world braces for the spreading coronavirus that originated in China, Pompeo has taken the battle to the journalistic arena. After China expelled the Wall Street Journal reporters, Pompeo issued a statement deriding Beijing’s reaction, suggesting it was being juvenile.

“Mature, responsible countries understand that a free press reports facts and expresses opinions,” Pompeo said in a statement. “The correct response is to present counter-arguments, not restrict speech.”

Then, Pompeo accused China of covering up the magnitude of the coronavirus outbreak and allowing it to spread and endanger people around the world.

“Expelling our journalists exposes, once again, the governance issue that led to Sars and, now, the coronavirus, namely censorship,” he said in a news conference, applauding the “brave reporters” covering the outbreak in China.

“It can have deadly consequences,” he said. “Had China permitted its own and foreign journalists and medical personnel to speak and investigate freely, Chinese officials and other nations would have been far better prepared to address the challenge.”