China Strikes Back at U.S. Sanctions With New Export Ban Targeting Defense Firms
China has retaliated against recent U.S. sanctions targeting some of its largest technology companies by imposing new export restrictions on a group of American defense-related firms.
The measures, announced Monday by China’s Ministry of Commerce, prohibit 10 U.S. companies from receiving Chinese dual-use goods, which are products and materials with both civilian and military applications.
The move comes weeks after the Pentagon expanded its list of companies it says have ties to China’s military, adding major Chinese firms including Alibaba, Baidu, BYD, CXMT, and other technology and industrial giants.
According to Chinese authorities, the newly targeted American companies include rare earth producers MP Materials and USA Rare Earth, as well as defense and aerospace-related firms such as Aveox and other contractors linked to military programs. Beijing said the restrictions were implemented to safeguard national security and fulfill non-proliferation obligations.
Under the new rules, Chinese exporters are barred from supplying dual-use items to the sanctioned firms. Unlike previous restrictions that allowed exports under a licensing process, the latest measures amount to a full prohibition, significantly tightening access to Chinese materials and components.
Earlier this month, the Pentagon designated several major Chinese technology firms as “Chinese Military Companies,” a classification that can discourage investment and limit future government contracting opportunities. Alibaba and Baidu strongly rejected the designation, arguing they have no military affiliations.
Beijing has repeatedly criticized the U.S. blacklist, describing it as an abuse of national security concepts and an attempt to suppress Chinese companies. China’s Commerce Ministry said it was “strongly dissatisfied” with Washington’s decision and pledged to take measures to protect the legitimate rights and interests of Chinese enterprises.
China’s Finance Ministry expanded restrictions on American firms’ access to government procurement contracts. The ministry added 46 U.S. companies, including major defense contractors such as Lockheed Martin, RTX (formerly Raytheon), and General Dynamics, to a list barring them from participating in certain Chinese government purchasing activities. Companies operating inside China with U.S. investment were exempted from the procurement ban.
Analysts said the immediate commercial impact of the export controls could be limited because many of the targeted companies have relatively small business operations in China. Rare earths have become a particularly sensitive area in the dispute. China remains the world’s dominant supplier of many rare earth elements essential for defense systems, electric vehicles, semiconductors, and advanced electronics.
