This is pretty much exactly how reciprocity works in other areas like travel and immigration. We treat their nationals as they treat ours. You can see examples worldwide right now with travel restrictions.
And these Chinese companies benefit from the lack of US-based competition at home. Would WeChat ever have gotten that big without China's restrictions on US companies? It's not arbitrary to counter that benefit with a loss of access to the US.
Congress specifically gives the president the power to counter unfair trade practices by foreign governments. The president executes the laws, he doesn't dictate them.