China on Monday imposed sanctions on 10 American defense-related companies in retaliation for a recent US move barring leading Chinese tech firms from military contracts.
The Commerce Ministry said that Chinese companies would be blocked from exporting “dual-use” items to the 10 companies, which include military drone makers, and some involved in rare earth mining. Dual use refers to goods that can have military as well as non-military applications.
The ministry said the export ban was both to safeguard China’s national security and in response to what it called the U.S. government’s “wrongful expansion of its so-called List of Chinese Military Companies.”
Separately, the Finance Ministry said that government entities would be prohibited from buying products from 46 American companies including Lockheed Martin and Raytheon Missiles and Defense, the official Xinhua News Agency reported.
Earlier this month, the US Defense Department added several tech companies including Alibaba and Baidu to its list of firms that it says have links to the Chinese military. Baidu said the suggestion that it is a military company is “totally baseless.”
The designation prevents them from getting US military contracts.
The Commerce Ministry said at the time that the American sanctions run counter to the consensus that Chinese leader Xi Jinping and US President Donald Trump reached during Trump’s visit to China in May.
In Monday’s announcement, the ministry said that companies or individuals in third countries are prohibited from transferring dual-use items from China to the sanctioned American firms. It also said that Chinese companies could apply for export approval for goods that are “genuinely necessary.”
The 10 companies are AVEOX in Simi Valley, California; Red Cat Holdings and Teal Drones, both in South Salt Lake, Utah; IMSAR in Springville, Utah; Jaia Robotics in Bristol, Rhode Island; Ball Aerospace and Technologies in Broomfield, Colorado; Oshkosh Defense in Oshkosh, Wisconsin; L3Harris Maritime Services in Norfolk, Virginia; MP Materials in Las Vegas; and USA Rare Earth in Stillwater, Oklahoma.
