On June 22, Beijing imposed export restrictions on 10 U.S. companies linked to the American military, in what was seen as a retaliation for recent Washington sanctions.
According to China’s Commerce Ministry, 10 companies will be denied exports of “dual-use” goods—items with both civilian and military applications—from Chinese firms. The Associated Press (AP) reported that some of the companies are military drone manufacturers, while others are linked to rare earth minerals.
“Export operators are prohibited from exporting dual-use items to the above-mentioned 10 entities. Any organization or individual in any country or region is also prohibited from transferring or providing dual-use items originating from China to these entities. Any ongoing related export activities must be stopped immediately,” the ministry stated.
The sanctions, the ministry also said, would protect China’s national security after the U.S. expanded its so-called “List of Chinese Military Companies” in what it described as a wrongful move.
The 10 U.S.-based companies included in the sanctions are AVEOX, Red Cat Holdings, Teal Drones, Inverse Synthetic Aperture Radar (IMSAR), Jaia Robotics, Ball Aerospace & Technologies, Oshkosh Defense, L3Harris Maritime Services, MP Materials and USA Rare Earth.
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In addition to the blacklisted companies, government bodies are barred from purchasing from 46 U.S. companies including Lockheed Martin, Raytheon and General Dynamics, though no reason was given for the ban.
The ministry also warned that entities in third countries are not permitted to transport dual-use items from China to the affected U.S. firms. However, it added that goods deemed “genuinely necessary” could be submitted for export approval through Chinese companies.
George Chen of The Asia Group called the ban an expected and proportionate countermove to Washington’s actions.
“Most of them are U.S. defense industry players or they have close connections with the U.S. government for contracts and other reasons,” Chen said. “Those companies are not going to do business in China, so the impact will be quite symbolic.”
On June 29, China also imposed new export restrictions on several Japanese firms following rising tensions between Beijing and Tokyo.
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America’s ban list
On June 8, the U.S. government added several Chinese companies—including Alibaba, BYD, and Baidu—to its “Chinese military companies” list, restricting U.S. defense contractors from doing business with them.
The list was first created in 2021 under a congressional mandate to identify Chinese companies the Pentagon believes have direct or indirect ties to China’s military.
In 2025, the Pentagon claimed that the Chinese military was looking to take advanced technologies and skills from companies or programs that “appear to be civilian entities.”
In response, Alibaba, BYD and Baidu all contested that there was no reason for them to be on the list.
“Alibaba is not a Chinese military company nor part of any military-civil fusion strategy,” a statement from Alibaba read.
Baidu called the Pentagon’s accusations “entirely baseless.”
Baidu, defending itself by claiming to be “not a military enterprise,” said it “will actively safeguard its legitimate rights and interests through all feasible administrative and legal means,” while also stating that the Pentagon’s claims “seriously contradict the facts.”
Alibaba also filed a lawsuit on June 23 against the U.S. Department of Defense for being designated a “Chinese military company,” al-Jazeera reported.
“The determinations have no basis in fact or law,” the company said in its lawsuit. “Alibaba is governed by an independent board, none of whom has any military affiliation.”
“Its products and services are built for retail, logistics, and enterprise information technology — not weapons, defense, or intelligence,” it added.
