China sanctions 56 US firms over Pentagon blacklistings

China Adds 10 US Firms to Export Control List in Retaliation for Pentagon Blacklistings

China’s Ministry of Commerce announced on Monday that it will place 10 American companies on its export control list, prohibiting exports of dual-use items to the targeted firms. The move came alongside a separate decision by China’s Ministry of Finance to exclude 46 US companies from government procurement.scmp

Retaliatory Measures

The actions are a direct response to the US Department of Defense’s decision on June 8 to add several Chinese technology companies — including Alibaba, Baidu, and BYD — to its “Chinese military-industrial complex list.” A spokesperson for the Commerce Ministry said the measures were taken “to safeguard national security and interests and fulfill international obligations such as non-proliferation.”chosun

The 10 firms added to the export control list include companies linked to the US defense sector and rare earth production, such as MP Corp, USA Rare Earth, Oshkosh Defense, and Aveox. Under the measure, exports of civil-military dual-use items from China to these companies are prohibited. The Ministry of Finance’s procurement restrictions target subsidiaries of major defense contractors including Lockheed Martin.chosun

Rare Earth Pressure on Japan

The announcement comes as China’s broader rare earth export controls continue to squeeze supply chains across the region. Data released on Saturday showed that China’s exports to Japan of several rare earths used for powerful magnets were negligible in May, extending a months-long supply disruption caused by a diplomatic dispute with Beijing over Taiwan.businesstimes

China imposed a ban on dual-use exports to Japan in January 2026, targeting items that could enhance Japan’s military capabilities. Despite reported US pressure to lift the restrictions, Beijing reaffirmed in early June that the export ban remains in place.geopolitechs

Escalating Trade Tensions

The latest round of restrictions fits within an escalating cycle of trade measures between Washington and Beijing. Since early 2025, China has repeatedly used its export control list and unreliable entity list to target US defense-linked firms, while the US has expanded its own restrictions on Chinese access to advanced semiconductors and AI technology. The suspensions of some rare earth controls agreed in late 2025 are set to expire in November 2026, raising the prospect of further supply chain disruptions ahead.aljazeera