China Retaliates Against U.S. Sanctions, Restricts Export of Dual‑Use Goods to American Defense Firms

BEIJING — China announced on Monday that it is imposing sanctions on ten U.S. defense contractors in response to the United States’ recent restriction on certain leading Chinese technology firms from participating in defense contracts.

The Ministry of Commerce stated that Chinese companies will be barred from exporting dual‑use items to these ten firms, which include manufacturers of military drones and entities involved in rare‑earth mining. Dual‑use items are goods that can serve both civilian and military purposes.

The ministry said the action is intended to safeguard China’s national security and to counter what it describes as the U.S. government’s improper expansion of its so‑called List of Chinese Military Companies.

It previously indicated that the American sanctions conflict with the agreement reached between Chinese President Xi Jinping and U.S. President Donald Trump during Trump’s May visit to China.

Earlier this month, the U.S. Department of Defense added several technology firms—including Alibaba and Baidu—to its list of entities it alleges have ties to the Chinese military. Baidu said the suggestion that it is a military company is “totally baseless.”

The designation prevents these firms from obtaining U.S. military contracts.

China’s Commerce Ministry said that Chinese companies may apply for export approvals for items that are genuinely necessary, and it warned that third‑country companies or individuals are prohibited from transferring dual‑use goods from China to the sanctioned U.S. firms.

The ten sanctioned 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 & 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.

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