Beijing imposed export controls on ten U.S. industrial suppliers on Monday, including rare earth miners and drone manufacturers, escalating the ongoing trade tensions between the two nations.
China’s Ministry of Commerce has targeted ten American industrial suppliers, including MP Materials Corp. (NYSE:MP) and USA Rare Earth Inc. (NASDAQ:USAR), and drone manufacturers Teal Drones and Jaia Robotics. The list also includes California-based electronics manufacturer Aveox Inc, Ball Aerospace & Technologies Corp, and military equipment supplier Oshkosh Defense. The new regulations prohibit exports of any dual-use items originating in China to these companies.
The Ministry stated that these measures are a response to the “U.S. government’s malicious practice” and are intended to protect national security and interests, as well as to fulfill international obligations such as non-proliferation.
In a separate statement on Monday, China’s Finance Ministry said it has barred 46 U.S. companies—primarily defense contractors—from participating in Chinese government procurement projects. However, foreign-funded companies registered locally in China and their affiliates are exempt from the restriction.
U.S.-China Trade Tensions Escalate
This move by China comes in the wake of increased scrutiny of Chinese tech giants by the U.S. Earlier this month, the Pentagon expanded its blacklist of companies, including Alibaba Group Holding Ltd. (NYSE:BABA), Baidu Inc. (NASDAQ:BIDU) and BYD Co.Ltd. (OTC:BYDDY), suspected of having ties to China’s military or defense-industrial sector. This blacklist prevents the Department from contracting directly with these companies and procuring their products or services through third parties.
At the same time, the Trump administration has reportedly postponed adding Chinese AI firm DeepSeek, memory chipmaker ChangXin Memory Technologies (CXMT), and more than 100 other Chinese companies to the U.S. Commerce Department’s Entity List, despite approval by an interagency committee last year. According to Reuters, the delay has left the companies off a blacklist that would significantly restrict their access to U.S. goods, software, and technology. The U.S. has not announced new Entity List additions since October, the longest pause in updates in over a decade.
Han Shen Lin, China country director at the consultancy The Asia Group, told CNBC that Beijing’s response appears largely symbolic rather than a major escalation in U.S.-China tensions, since most of the targeted companies have little to no significant business presence in China.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock
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