Pentagon adds 60 Chinese tech firms to military blacklist

The Pentagon on Monday added Alibaba Group Holding Ltd., BYD Co. and Baidu Inc. to its list of Chinese military-linked companies, expanding the blacklist to 188 entities in a move that threatens to reignite tensions between the world's two largest economies less than a month after President Donald Trump met Xi Jinping in Beijing.

"The publication of this list serves as a post Trump-Xi summit reality check on the heightened state of U.S.-China competition," said Craig Singleton, a China expert at the Foundation for Defense of Democracies in Washington. "Washington is no longer treating these as isolated companies. It is treating the entire technology stack as strategically contested."

The updated Section 1260H list, known as the CMC list, now covers 188 Chinese entities, up from roughly 130 a year ago. New additions span the breadth of China's technology sector: e-commerce giant Alibaba, search and AI company Baidu, electric vehicle manufacturers BYD and Nio Inc., memory chipmakers CXMT and YMTC, biotech firm WuXi AppTec, robotics company Unitree, lidar makers Hesai Group and RoboSense Technology Co., solar suppliers JA Solar Holdings Co. and Trina Solar Co., battery makers CALB and EVE Energy Co., networking equipment maker TP-Link Technologies Co., and display-panel manufacturer BOE Technology Group Co.

The designation does not impose immediate sanctions but carries significant consequences. Starting later this month, the Defense Department will be prohibited from contracting directly with listed companies, and from buying their products or services through third parties beginning in 2027. The list also serves as a warning signal to Pentagon suppliers and other U.S. government agencies about the military's assessment of these firms, some of which have previously sued the U.S. over their inclusion.

Escalation after a fragile thaw

The update comes less than a month after Trump met Xi in Beijing in May, where the two leaders maintained a delicate trade war truce. In February, the Pentagon briefly posted an updated list but quickly withdrew it with little explanation as Trump's trip to China was being arranged. The new version mirrors that withdrawn February list, with the addition of CXMT and YMTC — two companies that had been removed from the February index, drawing criticism from Washington's China hawks.

The previous escalation in trade tensions saw the U.S. average tariff rate on Chinese goods rise to roughly 19 percent after the 2024-2025 rounds, reducing bilateral trade by an estimated $120 billion over 18 months, according to Census Bureau data. The current blacklist expansion targets companies the Pentagon says are affiliated with China's Ministry of Industry and Information Technology, which oversees the country's technology and industrial policies.

House Select Committee on the Chinese Communist Party Chair John Moolenaar called the updated list "a warning to American businesses, all levels of government, and the American people. These Chinese companies are working with the Chinese military against our national interests."

Companies push back

China's embassy in Washington said Beijing opposed "making discriminatory lists to go after Chinese companies," adding that its firms observe local laws and regulations. "The U.S. should stop its wrong practice and create a fair, just and non-discriminatory environment for Chinese companies," an embassy spokesperson said.

WuXi AppTec told Reuters its inclusion was "clearly a mistake" and that it would take immediate actions to "correct this erroneous designation." Alibaba, Baidu, BYD, CXMT, YMTC, Unitree and CNOOC did not immediately respond to requests for comment.

The Pentagon said listed firms "qualify for designation as 'Chinese military companies'" and operate in the U.S. Companies can petition for removal, it added. Some entities, including two CNOOC-owned subsidiaries, were removed from the list — not because the U.S. determined they aren't linked to China's military, but because they no longer operate in the U.S. or because an entity's name changed.

The expanded blacklist carries material costs for the affected firms and their partners. Alibaba trades on the New York Stock Exchange, and BYD dominates the global electric vehicle market — Trump said in January he would welcome Chinese carmakers if they built plants in the U.S. and hired American workers, though several lawmakers have since called for a ban on Chinese EVs. The Pentagon's designation complicates access to U.S. capital markets and government business for all 188 entities, potentially disrupting supply chains across EVs, semiconductors, solar energy and biotechnology.

This article is for informational purposes only and does not constitute investment advice.