The Chinese government is imposing sanctions on a slew of U.S. companies in retaliation for a U.S. decision to “bar some leading Chinese tech companies from defense contracts” (Associated Press, June 22, 2026).
[China’s] Commerce Ministry said that Chinese companies would be blocked from exporting “dual-use” items to the 10 companies, which include military drone makers and some involved in rare earth mining. Dual use refers to goods that can have military as well as non-military applications.
The ministry said [that the purpose of] the export ban was both to safeguard China’s national security and [to respond] to what it called the U.S. government’s “wrongful expansion of its so-called List of Chinese Military Companies.”….
Earlier this month, the U.S. Defense Department added several tech companies including Alibaba and Baidu to its list of firms that it says have links to the Chinese military. Baidu said the suggestion that it is a military company is “totally baseless.”
The designation prevents them from getting U.S. military contracts.
The Commerce Ministry said at the time that the American sanctions run counter to the consensus that Chinese leader Xi Jinping and U.S. President Donald Trump reached during Trump’s visit to China in May.
Contrary to the Ministry, it’s the May meeting between Trump and Xi that is the problem, not any further sporadic efforts since then by the U.S. government to protect the United States from the People’s Republic of China. The meeting is representative of the recent failures of the American government, as led by President Trump, in this regard.
The sanctioned companies
The ten U.S. companies targeted by China’s sanctions are AVEOX, Red Cat Holdings, Teal Drones, IMSAR, Jaia Robotics, Ball Aerospace & Technologies, Oshkosh Defense, L3Harris Maritime Services, MP Materials, and USA Rare Earth.
MP Materials runs the only active rare-earth mine, the Mountain Pass mine, in the United States. USA Rare Earth produces neodymium-iron-boron magnets and is pursuing mining and manufacturing projects.
One analyst suggests that the ten companies “are not going to do business in China, so the impact will be quite symbolic.” If the CCP is just going through the motions here, perhaps it is not very worried about the sanctions and controls that the U.S. still imposes.
Also see:
Politico: “China Dominates the Rare Earths Market. This U.S. Mine Is Trying to Change That.” (December 14, 2022)
“The Mountain Pass mine, which resumed operations in 2012 after years of dormancy, today supplies around 15 percent of the world’s production of rare earths, a group of 17 minerals used to make the magnets in America’s most advanced commercial and military technology, from electric vehicles to Virginia-class attack submarines.”
