The State Department announced Monday that it rejects most of China's territorial claims in the South China Sea, a first from the U.S. as the Trump administration toughens its approach toward Beijing.Why it matters, via Axios' Bethany Allen-Ebrahimian: This is a significant, if symbolic, step toward a tougher U.S. approach to China's attempted annexation of the open seas.The Obama administration was heavily criticized for its light-handed approach in the South China Sea as China openly disregarded the status quo and flouted international law.But despite its tough rhetoric on China, the Trump administration had previously made little substantive change to the Obama-era strategy of occasional freedom-of-navigation operations there. The big picture: In 2016, an international court in the Hague ruled that the bulk of China's claims in the South China Sea did not have a basis in international law. China has ignored that ruling.The tribunal rejected China's argument that it enjoys historic rights over the South China Sea, according to the New York Times.The U.S. is essentially adopting the court's position with its rejection of China's territorial claims.Between the lines: The U.S. will remain neutral in territorial disputes, but the announcement effectively means the Trump administration will be siding with Brunei, Indonesia, Malaysia, the Philippines and Vietnam — all of which oppose China's claims to areas surrounding contested islands, reefs and shoals, per AP.The state of play: The State Department said China has "no lawful territorial or maritime claim to (or derived from) James Shoal, an entirely submerged feature only 50 nautical miles from Malaysia and some 1,000 nautical miles from China's coast."The U.S. also said it rejects any of China's claims to waters beyond a 12 nautical mile territorial sea derived from islands China claims in the Spratly Islands.The State Department also rejects China's claim to Mischief Reef or Second Thomas Shoal, asserting that both fall under the Philippines's sovereign rights and jurisdiction.Yes, but: The U.S. isn't legally part of the UN Law of the Sea treaty, so it's not yet clear what the implications of this announcement will be, per AP.What they're saying: "The world will not allow Beijing to treat the South China Sea as its maritime empire. America stands with our Southeast Asian allies and partners in protecting their sovereign rights to offshore resources, consistent with their rights and obligations under international law," Secretary of State Mike Pompeo said in a statement."We stand with the international community in defense of freedom of the seas and respect for sovereignty and reject any push to impose ‘might makes right’ in the South China Sea or the wider region.”Context: China has been slowly expanding its power in the South China Sea while the world has been preoccupied with the coronavirus pandemic. Beijing announced in April that it created two new municipal districts to administer disputed regions in the South China Sea that are also claimed by other countries in the region. Chinese ships also trailed a Malaysian vessel operating in waters near Malaysia.Nearly $5 trillion worth of goods are shipped through the South China Sea annually. Go deeper: Amid pandemic, China expands control over contested waters