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The Ministry of Commerce of China announced on Monday, with immediate effect, two retaliatory measures against U.S. companies: the inclusion of 10 companies on its export control list for dual-use products and the prohibition of 46 defense and technology firms from participating in public procurement bids from the Chinese government.
According to ABC News, the decision comes less than two weeks after the Pentagon expanded its list of companies deemed linked to the Chinese military, adding on June 8 65 new entities -including Alibaba, Baidu, BYD, Tencent, and Unitree- bringing the total to 188 brands under that designation.
The 10 companies in the spotlight
The U.S. companies now included on the control list are Aveox, Red Cat Holdings, Teal Drones, IMSAR, Jaia Robotics, Ball Aerospace & Technologies, Oshkosh Defense, L3Harris Maritime Services, MP Materials, and USA Rare Earth.
It is not a random selection: they operate in drones, robotics, aerospace technology, maritime services, and, notably, in the extraction and processing of rare earths.
The measure prohibits Chinese operators from exporting dual-use products to them, requires them to immediately cease ongoing operations, and also forbids third countries from transferring goods of Chinese origin to these firms.
The Chinese Ministry of Commerce justified the decision by stating that it is made with the aim of "safeguarding national security and interests."
The ban on 46 defense giants
Separately, the Chinese Ministry of Finance prohibited government entities from acquiring products from 46 American companies, including multiple divisions of Lockheed Martin, Raytheon, General Dynamics, and Boeing Defence, according to La Vanguardia.
The direct economic impact is limited, as these firms have little exposure to the Chinese market, and joint ventures that already operate in the country with local partners are exempt from the ban.
George Chen, partner for Greater China at the advisory firm The Asia Group, described the retaliation as "an unsurprising and proportional response," although he warned that the effect will be "quite symbolic," given that the affected companies "will not be doing business in China."
Rare earths, the most strategic blow
The most sensitive element of the retaliation is the inclusion of MP Materials and USA Rare Earth, the two main bets of Washington to reduce its dependence on China for critical minerals.
MP Materials operates the only active rare earth mine in the United States, located in Mountain Pass, California, and has an agreement with the Department of Defense that guarantees a minimum price of 110 dollars per kilogram of neodymium and praseodymium for a decade.
China controls approximately 70% of the world's rare earth mining and 90% of global refining capacity, making its position a structural bottleneck for defense, electric vehicles, and advanced electronics.
The measure comes just days after G7 leaders committed in Paris, on June 17, to reduce their dependency on single suppliers for rare earths to less than 60% by 2030.
The break of the spirit of Beijing
The tension is particularly striking as it occurs just a month after the State visit of Trump to Beijing in May 2026, where Xi Jinping and the U.S. president agreed to build a “constructive strategic stability relationship.”
After the expansion of the Pentagon's list, a Chinese government spokesperson warned that the measures were "against the spirit of détente from the recent summit in Beijing" and promised "a strong response" if they were not lifted.
The Chinese Ministry of Commerce also accused Washington of "abusing state power to suppress Chinese companies."
A war that is no longer measured in tariffs
This is not the first time that China resorts to export controls as a pressure tactic: in April 2025, it already included 12 American companies on a similar list in retaliation for Trump's tariffs.
What distinguishes current sanctions is their precision: they do not paralyze bilateral trade, but they punish sectors that Washington considers strategic for its national security and introduce regulatory risks for international investors and suppliers.
As noted in the analysis by the digital portal Negocios.com, "five-year industrial planning becomes almost impossible when a political decision can disrupt an entire chain within 24 hours," a warning that encapsulates the new climate of rivalry between the two largest economies in the world.
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