China has escalated its trade tensions with the United States by imposing new export controls targeting 28 American companies. This move, announced by China’s Ministry of Commerce on Thursday, aims to safeguard the country’s national security and interests. Among the targeted firms are major U.S. defense contractors such as Lockheed Martin, General Dynamics, Raytheon, and a subsidiary of Boeing.
Chinese companies are now barred from selling “dual-use” items—goods that can be used for both civilian and military purposes—to any of the listed entities. This restriction comes amidst ongoing trade disputes between the two largest economies, with both nations increasingly using sanctions and export controls to exert geopolitical influence.
In addition to the broader export controls, China has added 10 of the targeted companies, all subsidiaries of Lockheed Martin, General Dynamics, and Raytheon, to its “Unreliable Entities List.” These companies face stricter sanctions, including prohibitions on importing or exporting goods to and from China and restrictions on making new investments in the country. Moreover, executives of these firms are banned from traveling to China, and any work or residency permits they hold have been revoked.
The Ministry of Commerce stated that these measures were implemented to protect China’s sovereignty and development interests. It also cited the companies’ arms sales to Taiwan, a democratically governed island that Beijing considers part of its territory, as a key factor in the decision. Last month, China had already announced an earlier round of sanctions targeting U.S. firms involved in military sales to Taiwan.
While the sanctions may seem impactful on paper, experts suggest that the practical effects on the targeted U.S. defense contractors will likely be minimal. These companies do not conduct significant business with China, and their primary clientele includes the U.S. government and allied nations. As a result, the new restrictions are unlikely to disrupt their operations or revenue streams significantly.
The sanctions, however, serve as a symbolic response to U.S. actions against Chinese companies. In recent months, the United States has implemented measures such as banning the sale of advanced semiconductor manufacturing equipment to Chinese firms and restricting investments in certain Chinese technology sectors. Beijing’s latest move reflects its willingness to respond forcefully to U.S. policies it perceives as threatening.
China’s decision also coincides with the return of President-elect Donald Trump to the White House, who has vowed to pursue a tough stance on China. During his campaign, Trump proposed imposing higher tariffs on Chinese goods, a policy that aligns with his administration’s first-term efforts to reshape U.S.-China trade relations. Analysts suggest that Beijing’s actions may be a preemptive signal to the incoming administration, indicating its readiness to counter any further escalation.
The broader context of these trade tensions includes China’s recent restrictions on rare earth minerals, critical components in high-tech products, in response to U.S. sanctions. These minerals, such as gallium and germanium, are essential for various industries, including electronics and defense.
While the sanctions’ direct economic impact may be limited, the latest measures highlight the deepening divide between the two nations. As trade and geopolitical conflicts intensify, both sides appear increasingly willing to use economic tools to assert their interests, creating an uncertain landscape for global businesses and supply chains.
