Dozens of American companies were hit with fresh trade restrictions by China on Monday in retaliation for the Pentagon’s decision to place additional Chinese firms on its list of businesses linked to the military.
According to CNBC, China Ministry of Commerce has placed 10 US industrial suppliers on its export control list, effectively barring them from receiving any dual-use goods originating from China.
Among the companies affected are rare earth miners MP Materials Corp and USA Rare Earth, drone makers Teal Drones and Jaia Robotics, California-based electronics firm Aveox Inc, Ball Aerospace & Technologies Corp, and military equipment supplier Oshkosh Defence.
The restrictions were widened further as China’s Finance Ministry also blocked 46 US companies—largely defence contractors—from accessing Chinese government procurement contracts, though foreign-funded firms registered locally and tied to the listed companies were exempt from the measures.
The developments come after the Pentagon expanded its so-called 1260H list earlier this month, adding a new wave of Chinese companies it says are linked to Beijing’s military ambitions.
The latest companies added include Alibaba Group, Baidu, and electric vehicle manufacturer BYD.
Analysts have urged caution in interpreting the response, with Han Shen Lin, China country director at consultancy The Asia Group, describing Beijing’s countermeasures as “largely symbolic, rather than a substantive escalation in U.S.-China relations,” and noting that most of the affected firms have “little or no meaningful business exposure in China.”
Under the 1260H framework, the designation stops short of full sanctions but still imposes significant limits, including a ban on the U.S. Department of Defense awarding direct contracts to listed firms from June 30. Broader restrictions on indirect procurement are scheduled to follow in 2027, while the label is also expected to have a chilling effect on engagement from other U.S. agencies and commercial partners.
Earlier this month, Chinese officials indicated they would push back against the move, pledging to use “all necessary measures” to defend what they described as the “legitimate and legal rights and benefits” of Chinese firms. They also criticised Washington for compiling what they called discriminatory lists under the guise of national security.
The latest countermeasures are seen as reflecting Beijing’s wider strategic approach. Dan Wang, China director at Eurasia Group, called them a “model example” of how China is likely to respond to limited US escalation while still seeking to preserve overall stability in bilateral ties, noting that last month’s Trump–Xi summit helped reset relations on a more constructive trajectory.
Analysts say that, even if the measures are mostly symbolic, the Pentagon’s designations highlight how extensively Washington is now broadening its scrutiny of sensitive Chinese technologies, including areas such as artificial intelligence, consumer electronics, and biotechnology.
Some of the affected Chinese firms have begun pushing back, with several rejecting their listings and indicating plans to pursue legal challenges for removal — a route that has worked in the past. Notably, Chinese smartphone manufacturer Xiaomi previously contested its designation in court and was successfully delisted in May 2021.
