China Strikes Back at US Military Restrictions with Fresh Defence Industry Sanctions

China on Monday imposed sanctions on 10 US defence-related companies in retaliation for Washington’s restrictions on Chinese firms allegedly linked to the military. The Chinese Commerce Ministry announced a ban on exports of dual-use goods products with both civilian and military applications to the targeted American companies, citing national security concerns .

The sanctioned firms include drone makers, aerospace companies, defence suppliers and rare-earth firms such as AVEOX, Red Cat Holdings, Teal Drones, IMSAR, Jaia Robotics, Ball Aerospace & Technologies, Oshkosh Defense, L3Harris Maritime Services, MP Materials and USA Rare Earth.

Separately, China’s Finance Ministry barred government entities from purchasing products from 46 US companies , including major defence contractors Lockheed Martin and Raytheon Missiles & Defence .

The move follows the US Defence Department’s decision to add Chinese technology giants Alibaba and Baidu to its list of companies allegedly connected to China’s military. The designation restricts their access to US defence contracts, though the firms have rejected the allegations.

Beijing accused Washington of violating the understanding reached between Chinese President Xi Jinping and US President Donald Trump during Trump’s visit to China in May. China also warned that third-country companies would be prohibited from transferring Chinese dual-use items to the sanctioned US firms.

The latest dispute highlights the growing US-China rivalry over defence technology, supply chains and strategic influence .

The tensions come as China continues expanding its defence partnerships globally, while its defence relationship with India remains limited due to longstanding border disputes, including the Line of Actual Control (LAC) tensions. India and China have focused mainly on military communication and border management rather than major defence cooperation.

Following the 2020 eastern Ladakh standoff , defence ties between the two countries have remained cautious, with both sides strengthening military deployments along the disputed border. India has meanwhile accelerated indigenous defence production and expanded strategic defence partnerships with countries including the US, France and Russia.