China Retaliates Against US With Defense Company Sanctions

China has imposed export restrictions on 10 U.S. companies, including two involved in rare earth mining, in retaliation for the Pentagon adding Chinese tech giants to its watch list of military-linked firms.

The controls prohibit the export of dual-use items to the American firms and apply to goods of Chinese origin held by entities and persons in other countries, China’s Commerce Ministry said on Monday.

“Relevant export activities that are being carried out should be stopped immediately,” the announcement said.

The move was a response to “the U.S. government’s malign practice” and would safeguard China’s national security and fulfill its “nonproliferation and other international obligations,” a ministry spokesperson said in a separate statement.

Newsweek has contacted the Pentagon for comment outside normal working hours.

What China’s New Restrictions Do

The restrictions may be largely symbolic as the companies work closely with the U.S. Defense Department and likely have little to no business in China.

The sanctions list included U.S. defense industry drone or drone hardware suppliers:

• AVEOX
• Red Cat
• Teal Drones
• IMSAR
• Jaia Robotics
• BAE Systems’ Space & Mission Systems
• Oshkosh Defense
• L3Harris Maritime

It also included U.S. rare earth companies:

• MP Materials
• USA Rare Earth

MP Materials operates the Mountain Pass in California, the U.S.’s only rare earth mining and processing facility, and USA Rare Earth is in the process of building a wholly domestic magnet supply chain between Colorado, Texas and Oklahoma.

Pentagon Expands Tech Giants Watch List

Earlier this month, the Pentagon’s 1260H list of Chinese tech firms linked to China’s military modernization was updated to include electric-car makers BYD and NIO.

Search engine and mapping service provider Baidu and the e-commerce giant Alibaba, both of which are developing artificial intelligence models, were also added to the watch list.

The Pentagon list, which includes 188 Chinese entities, does not result in immediate sanctions but warns U.S. businesses of potential risks linked to future screening or investment restrictions.

Separately on Monday, China’s Finance Ministry said buyers involved in government procurement were now prohibited from purchasing products from 46 U.S. companies. However, the rule would not apply to U.S.-funded firms in China, according to the Xinhua state news agency.

The state-run tabloid Global Times said U.S. defense companies Lockheed Martin, Raytheon Missile & Defense, Boeing Defense, and Space & Security-all already under previous sanctions-were on the list issued to Chinese firms.

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This story was originally published June 22, 2026 at 2:52 AM.