China imposed trade barriers on more than 50 U.S. companies in response to the U.S. Department of Defense's blacklisting of Chinese companies for alleged ties to the Chinese military.
China’s Ministry of Commerce added 10 U.S. defense firms to its export control list, barring Chinese merchants from selling “dual-use” items that can be used for civilian or military purposes.
The banned corporations include AVEOX of California; Red Cat Holdings, Teal Drones and IMSAR of Utah; Jaia Robotics of Rhode Island; Ball Aerospace & Technologies of Colorado; Oshkosh Defense of Wisconsin; L3Harris Maritime Services in Virginia; rare-earth mine operator, MP Materials in Las Vegas, and rare-earth magnet maker USA Rare Earth in Oklahoma.
The Commerce Ministry affirmed that the export ban had been issued to “safeguard national security and interests and fulfill international obligations such as non-proliferation.”
Additionally, China’s Finance Ministry separately prohibited Chinese government entities from purchasing products manufactured by 46 U.S. companies, including Lockheed Martin, RTX and Boeing’s defense division.
Pentagon Accuses Chinese Companies of Aiding Chinese Military
Recently, the Pentagon published an updated list of private Chinese companies alleged to be owned or controlled by the Chinese military or “military-civil fusion contributors to the Chinese defense industrial base.”
Among the nearly two dozen companies added to the list are some of China’s largest and best-known companies, including e-commerce giant Alibaba Holdings, search engine giant Baidu, and electric automaker BYD.
Although the Pentagon’s blacklist only bars them from procurement with the U.S. military, the designation still impacts their reputations among future customers, which affects future supply chains.
U.S.-China Trade War
The Chinese Commerce Ministry’s inclusion of two U.S. rare earth producers indicates that China acknowledges its leg up in limiting U.S. capabilities in the materials needed for advanced electronics, defense systems, and renewable energy technologies.
Since the beginning of President Donald Trump’s second administration, rare earths have been a prominent point of trade tensions between the U.S. and China.
China imposed sweeping export controls on rare earths amid a bilateral trade war that began when President Trump imposed tariffs on all global partners under the International Economic Emergency Powers Act (IEEPA).
