China retaliates against US blacklist, targets defence and rare earth firms with export controls

NEW DELHI: China on Monday imposed export controls on 10 US companies involved in defence and rare earths mining, while also banning government procurement agencies from purchasing products made by dozens of American firms, escalating tensions between the world's two largest economies.The measures were announced weeks after the United States expanded its blacklist of companies it says support China's military, a move that prompted Beijing to warn of retaliatory action.China's commerce ministry said the new export controls were aimed at protecting national interests and were a direct response to Washington's latest restrictions.China's new export controls come "in response to the US government's egregious act of adding to its so-called 'Chinese military enterprise list'", the commerce ministry said in a statement, adding that the move was also intended to "safeguard national security".The 10 companies targeted by the export restrictions include Aveox, which holds aerospace defence contracts with the US military, and Oshkosh Defense, a manufacturer of military vehicle fleets. Chinese authorities did not immediately provide details on the specific restrictions that would apply to the firms.In a parallel move, China's finance ministry announced that agencies involved in public procurement would no longer be allowed to purchase products manufactured by 46 US companies.

The list includes some of America's largest defence contractors, such as Lockheed Martin, Raytheon and Boeing's defence division.The ministry said the restrictions would take effect immediately from Monday. However, it noted that companies with US investments operating in China would be exempt from the procurement ban.The latest measures mark a fresh deterioration in relations between Beijing and Washington, despite efforts by both sides to stabilise ties.

Just a month ago, US President Donald Trump travelled to Beijing for talks with Chinese President Xi Jinping, with both leaders seeking to ease tensions and improve economic cooperation.Those efforts were complicated after Washington released a new blacklist covering 80 companies and subsidiaries that US authorities allege are linked to China's military-industrial sector.The US blacklist included several prominent Chinese firms, among them technology giants Alibaba and Baidu, as well as electric vehicle manufacturer BYD.China has repeatedly criticised the blacklist, arguing that the United States is using national security concerns to suppress Chinese companies and restrict their access to global markets.Monday's announcement signals that Beijing is prepared to use trade and procurement measures in response, particularly against firms connected to the US defence sector, as competition between the two countries increasingly extends beyond tariffs and technology into broader areas of economic and strategic rivalry.