China Bans 25 More U.S. Defense Firms
China has imposed a new ban on 25 more U.S. defense firms, enlarging its list of American companies prohibited from economic activities in the country, marking a major escalation of trade tensions. In a press release this week, the Chinese Ministry of Commerce said that the step is meant to defend the country’s “national sovereignty and security.” The action effectively curtails current exports, blocks imports, and prevents the companies from making any new investments in China.
U.S. Tariff Response
China Bans 25 More U.S. Defense Firms. The announcement comes as trade disputes escalate with former U.S. President Donald Trump imposing higher tariffs on Chinese goods. China’s latest restrictions were announced a day before Trump’s two-hour speech to Congress on March 4, where he repeated his promise to impose “reciprocal tariffs.”
Whatever tariffs they put on us—other countries—we will put tariffs on them. That’s mutual, you know, back and forth. “Every time they tax us, we will tax them. “If they put up non-monetary barriers to keep us out of their markets, then we’re going to put up non-monetary barriers to keep them out of our markets,” Trump said.
Companies Hit by the Ban
The new restrictions include adding 10 firms to China’s Unreliable Entity List and imposing export control measures on 15 others. The following companies are listed as not reliable:
- Huntington Ingalls Industries Inc., the largest U.S. military shipbuilder
- S3 AeroDefence
- Cubic Corporation
- ACT1 Federal, a defense and space company
- TextOre and Exovera, both AI firms
- TCOM Limited Partnership
- Stick Rudder Enterprises LLC
- Teledyne Brown Engineering Inc.
Those trade curbs also remain in place against biotech firm Illumina Inc., which China last month added to its unreliable entity list. Fifteen other U.S. companies were added to the export control list, including the following:
- General Atomics Aeronautical Systems Inc.
- Leidos
- Gibbs & Cox Inc.
- IP Video Market Info Inc.
- Sourcemap Inc.
- Skydio Inc.
- Rapid Flight LLC
- Red Six Solutions
- Shield AI Inc.
- HavocAI
- Neros Technologies
- Group W
- Aerkomm Inc.
- General Dynamics Land Systems
- AeroVironment
Political and Economic Context
The timing of this announcement coincides with China’s annual Two Sessions Meeting, a high-profile political event attended by more than 5,000 delegates that aims to discuss key issues including economic strategy, foreign policy, and national security. Geopolitics analysts had expected the meeting to yield strong statements on Taiwan, which Beijing considers a renegade state. China has warned repeatedly it might use military force to take back the island. China earlier this year imposed similar bans on Lockheed Martin, Raytheon, and 26 other U.S. defense and dual-use technology companies in retaliation for Washington’s arms sales to Taiwan.
Rising Trade War Concerns
Experts warn that the China ban on 25 more U.S. defence firms could ratchet up tensions between Beijing and Washington and spark a broader trade war. China has already filed a legal complaint with the World Trade Organization (WTO) in response to the new U.S. tariffs. Prior to Trump’s speech, China’s foreign ministry, too, condemned the U.S. for tariffs on fentanyl-related matters. The ministry rejected the actions as an unfair attempt to shift responsibility to China, saying, “Rather than recognizing our efforts, the U.S. has attempted to smear and shift the blame to China, trying to pressure and blackmail China with tariff hikes. They’ve been punishing us for helping them.”
Conclusion
A March 4 posting on China’s state-run X (formerly Twitter) account doubled down on the defiance: “Intimidation doesn’t scare us. Bullying doesn’t work on us. “If the U.S. wants war, whether it’s a tariff war, a trade war, or any other kind of war, we’re ready to fight to the finish. ” The next few months could bring more retaliatory measures from both sides as tensions escalate, setting the course for U.S.-China trade relations for years.
References
- https://apnews.com/article/china-sanctions-us-companies-arm-sale-taiwan-31e1bdef85a4cae9a765b189497ca3bf
- https://english.mofcom.gov.cn/
- https://www.hii.com/
- https://www.wto.org/
- https://www.reuters.com/business/aerospace-defense/china-impose-sanctions-us-firms-over-taiwan-arms-sales-2020-10-26/
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