That's pretty much the policy for any country in the world that sees a domestic company being -in their view- unfairly blocked from doing business in another country. They tell them "if you discriminate against us, we will do the same to you".
The fact that the US hasn't retaliated much in the tech industry probably just demonstrates that the industry wasn't firmly enough in bed with the government when China began blocking access to google and facebook.
A more modern example of this sort of behavior might be the original US sanctions on Venezuela in the 2000s.
The fact that Google has offices in China, offers services in China and runs conferences in China should show that they aren't blocked as a company. Dragonfly wasn't shut down by China, but by Google after they faced internal push back by employees against supporting Chinese censorship.