The Chinese communist government on Monday added ten American firms to its export control list, including rare miner MP Materials Corporation and rare earth magnet manufacturer USA Rare Earth.
Other U.S. companies added to the Chinese export control list included Aveox, Red Cat Holdings, Teal Drones, IMSAR, Jaia Robotics, Ball Aerospace & Technologies Corp, Oshkosh Defense, and L3Harris Maritime Services.
Chinese officials claimed the restrictions were a response to similar U.S. controls on Chinese companies, but the target list made it look like Beijing was attempting to crush President Donald Trump’s initiative to build a domestic rare earth supply chain.
The Chinese Commerce Ministry banned Chinese companies from exporting “dual use” products, which could have civilian or military applications, to the ten listed American firms. It also issued an order banning Chinese government agencies from doing business with 46 U.S. companies, including Lockheed Martin, Boeing, and General Dynamics.
The Chinese government also prohibited “foreign institutions and individuals worldwide” from transferring Chinese dual-use goods to the American firms.
Analysts saw China’s action as retaliation for the Pentagon adding dozens of Chinese firms to its list of “Chinese military companies” two weeks ago. Some big names were added to the Pentagon list, including electric vehicle (EV) giant BYD and e-commerce titan Alibaba.
The Pentagon said its goal with the latest expansion of its 1260H list, named after the section of the 2021 National Defense Authorization Act (NDAA) that created it, was to expand the map of Chinese military-civilian fusion to include major technology, EV, battery, solar, and drone manufacturers.
China’s state-run Global Times on Monday said Beijing’s expanded blacklist was “a response to Washington’s repeated weaponization of unilateral sanctions and entity lists to suppress Chinese enterprises, including its groundless addition of Chinese firms to its so-called military-industrial entity list.”
A spokesperson for the Chinese Commerce Ministry admitted the action was a response to the “malicious” Pentagon expansion of the 1260H list, but also claimed China was interested in “safeguarding national security and interests, and fulfilling international obligations such as non-proliferation.”
Several other Chinese officials expressed anger at the U.S. for classifying Chinese firms as “military companies,” viewing it as an insulting U.S. use of “state power” to “unjustifiably suppress Chinese enterprises.” China’s use of state power to suppress foreign companies is always justified, of course.
A frequent complaint from these officials was that the Pentagon acted unilaterally to expand its export control list, without extensively consulting Chinese officials or corporate leaders. They also felt the U.S. had agreed during earlier trade negotiations to be a bit less aggressive about linking Chinese firms to the People’s Liberation Army (PLA). China’s inclusion of drone, maritime, and aerospace firms in its trade restrictions was seemingly intended to call out the U.S. for treating every Chinese drone firm as a wing of the PLA.
Chinese military affairs expert Zhang Junshe also told the Global Times that while Taiwan was not explicitly mentioned in Monday’s statement from the Commerce Ministry, the companies on its export control list are allegedly “deeply involved in matters concerning Taiwan and play important roles in the US arms-sales chain to the island.”
“Such activities have seriously undermined China’s national security and core interests, emboldened ‘Taiwan independence’ separatist forces to continue provoking the mainland, and disrupted the process of China’s peaceful reunification,” Zhang insisted.
American and European analysts said the Chinese Commerce Ministry’s orders would be very difficult to enforce, especially the commandments for third-party countries to refrain from selling or transferring Chinese products to the listed U.S. firms. Most of the American firms targeted by Monday’s action have already insulated their supply chains from Chinese interference.
The possible exception would be the two rare earth companies singled out by the Chinese Commerce Ministry, MP Materials Corp. and USA Rare Earth. The radical leftist publication New York Times (NYT) on Monday quoted analysts who suspected they were the most important names on the list of ten companies, especially in light of the recent G7 summit’s focus on building more robust (and implicitly less China-dependent) supply chains for critical minerals.
The G7 nations called for an ambitious four-year plan to ensure that no single nation controls more than 60 percent of the world’s rare earth production by 2030. China is the only country that would currently be affected by that prohibition, as it mines and refines anywhere from 60 to 90 percent of rare earths in various categories.
China has not been shy about using its control of mineral supply chains to bully other countries and it acts ruthlessly to protect the near-monopoly it has built over the past two decades. The Trump administration is counting on MP Materials and USA Rare Earth to help boost America’s domestic production, so Beijing will do whatever it can to kneecap those firms, and any others included in the critical minerals initiative President Donald Trump rolled out last year.
In July 2025, the Trump administration committed $400 million in equity financing to MP Materials, turning the Pentagon into the company’s largest shareholder.
The MP Materials deal included a ten-year commitment by the U.S. government to support rare earth prices and keep demand stable – a promise that would counter China’s favorite tactic of flooding markets with cheap goods to make the industry unprofitable, any time a major foreign competitor threatens Chinese dominance.
In January 2026, the U.S. Commerce Department invested $1.6 billion in USA Rare Earth, an Oklahoma-based firm that controls several domestic deposits of heavy rare earth materials that have defense applications. Several other rare earth companies have received significant funding and investment from the U.S. government over the past year, and the Trump administration has been eager to make deals with suppliers in allied countries to weaken China’s grip on the market.
Read the full article here