China has announced sanctions against 10 American defence-related companies, escalating tensions with Washington following a recent U.S. decision to restrict certain Chinese technology firms from accessing defence contracts.
The Chinese Commerce Ministry said on Monday that the affected companies would be barred from receiving exports of “dual-use” goods from China.
The restrictions target firms involved in areas including military drone production and rare earth mining.
Dual-use products are items that can serve both civilian and military purposes.
According to the ministry, the export controls were introduced to protect China’s national security and as a response to what it described as the U.S. government’s “wrongful expansion of its so-called List of Chinese Military Companies.”
In a separate move, China’s Finance Ministry announced that government agencies would be prohibited from purchasing products from 46 American companies, including several divisions of Lockheed Martin, Raytheon and General Dynamics. The ministry did not provide further details on the reason behind the purchasing restrictions.
The latest measures follow an earlier decision by the U.S. Defense Department to add several Chinese technology companies, including Alibaba and Baidu, to a list of firms it claims have ties to China’s military. Baidu rejected the allegation, saying the claim that it is a military company is “totally baseless.”
Companies placed on the U.S. list are restricted from receiving American military contracts.
China’s Commerce Ministry had previously criticized the U.S. action, saying the sanctions contradicted the understanding reached between Chinese President Xi Jinping and U.S. President Donald Trump during Trump’s visit to China in May.
In Monday’s statement, the ministry added that companies and individuals in third countries would also be prohibited from transferring dual-use products from China to the sanctioned American firms. However, it noted that Chinese companies could request approval to export items that are “genuinely necessary.”
The 10 companies affected by China’s sanctions are AVEOX of Simi Valley, California; Red Cat Holdings and Teal Drones of South Salt Lake, Utah; IMSAR of Springville, Utah; Jaia Robotics of Bristol, Rhode Island; Ball Aerospace & Technologies of Broomfield, Colorado; Oshkosh Defense of Oshkosh, Wisconsin; L3Harris Maritime Services of Norfolk, Virginia; MP Materials of Las Vegas; and USA Rare Earth of Stillwater, Oklahoma.
