China Slaps Restrictions on Dozens of U.S. Companies — Update

China imposed trade restrictions on dozens of U.S. entities including two rare earth producers, in a tit-for-tat retaliation against Washington's recent decision to expand its military-linked company list.

On Monday, the Chinese commerce ministry placed 10 U.S. defense contractors on an export control list, barring exports of any dual-use products made in China to those companies.

Targeted sectors include drones, robotics, aerospace, and strategic minerals. The inclusion of major rare earth producers--MP Materials and USA Rare Earth--is particularly notable, suggesting a strategic squeeze on materials critical for advanced electronics, defense systems, and renewable energy technologies.

MP Materials, which is backed by the Pentagon, is a leading U.S. miner and processor of rare earths, while USA Rare Earth is an emerging producer of these critical minerals. Both companies have aggressively ramped up capacity over the past year in response to export controls on key rare earths and magnets imposed by China last April.

The commerce ministry said that Monday's action was taken to safeguard national security and interests and fulfill international obligations, including nonproliferation, and was a direct response to the U.S. government's egregious practice of expanding the so-called "List of Chinese Military Companies."

In recent years, Beijing has increasingly resorted to its control over global supply chains-particularly in rare earths-to counter U.S. policies targeting Chinese firms.

In a separate statement, the Chinese finance ministry excluded 46 U.S. companies, including Lockheed Martin, Raytheon, and Boeing's defense division, from China's government procurement.

The finance ministry carved out products manufactured by U.S.-invested enterprises operating within China, a loophole suggesting Beijing is aggressively targeting direct U.S. imports while trying to minimize the collateral damage to domestic manufacturing.

Both measures took effect immediately. They follow the Pentagon's update earlier this month to its list of Chinese businesses identified as aiding Beijing's military. Around two dozen companies were added to the list, including tech giants Alibaba Group and Baidu, limiting their operations in the U.S.

Companies on this list are prohibited from doing business with the U.S. military. Additionally, the resulting reputational damage can hurt sales to other government agencies and American consumers.

Write to Singapore Editors at singaporeeditors@dowjones.com

(END) Dow Jones Newswires

June 21, 2026 22:39 ET (02:39 GMT)