China Hits Lockheed Martin, Raytheon, and Others with Sanctions Over Taiwan Arms Deals

China has escalated its response to U.S. arms sales to Taiwan by imposing sanctions on ten major American defense firms, including subsidiaries of Lockheed Martin, General Dynamics, and Raytheon, as well as barring key senior executives from entering the country. This move, announced by China’s Ministry of Commerce on Thursday, adds a new layer to the growing tensions between Beijing and Washington over Taiwan.

Beijing’s “Unreliable Entities List” Expands

The sanctioned companies have been added to China’s "Unreliable Entities List," a tool Beijing uses to penalize foreign firms it deems a threat to its sovereignty. These companies are now prohibited from engaging in import and export activities with China and barred from making new investments in the country.

The targeted firms include Lockheed Martin Corporation, a leading U.S. defense contractor responsible for producing the F-35 fighter jets and Patriot missile systems, and Raytheon Technologies, which supplies advanced missile defense systems and radar technologies. General Dynamics, known for its production of Abrams tanks and submarine systems, was also implicated. These companies played direct or indirect roles in recent arms packages supplied to Taiwan.

Dual-Use Export Controls Tightened

In a parallel action, China also added 28 American entities, mostly defense firms, to its Export Control List. This measure restricts these companies from receiving dual-use items—goods and technologies that could have both civilian and military applications. Among the new entrants to the list are Boeing Defense, Space & Security and Insitu, a subsidiary of Boeing that specializes in unmanned aerial vehicles (UAVs).

The stated purpose of these actions, according to the Chinese Ministry of Commerce, is to "safeguard national security and interests" while upholding international non-proliferation obligations. However, it also serves as a sharp rebuke to U.S. military assistance to Taiwan, which China views as interference in its internal affairs.

Taiwan’s Strategic Importance

Taiwan has been a critical flashpoint in U.S.-China relations. Beijing considers the self-ruled island a breakaway province and has repeatedly asserted its intention to unify Taiwan with mainland China, including by military force if necessary. In contrast, the U.S. does not officially recognize Taiwan as a sovereign state but remains its most significant strategic ally and arms supplier.

Washington has ramped up its support for Taiwan in recent years, with President Joe Biden approving $571.3 million in defense aid in December 2024. This aid package includes advanced weapons systems aimed at bolstering Taiwan's ability to defend itself against a potential Chinese invasion. The arms deal comprises air defense systems, anti-ship missiles, and advanced surveillance technology, which Beijing views as a direct threat to its regional dominance.

China’s Growing Military Pressure

China’s actions are part of a broader strategy to intensify pressure on Taiwan. Since President Lai Ching-te assumed office in May, Beijing has conducted three large-scale military drills in the Taiwan Strait, simulating scenarios that could be part of a potential invasion. These exercises involved aircraft carriers, fighter jets, and missile systems, underscoring China’s military capabilities and signaling its readiness to act if provoked.

The sanctions against American defense firms also come less than a week after Beijing sanctioned seven other U.S. military-industrial companies, including Insitu, for similar reasons. These repeated measures indicate a sustained campaign by China to push back against U.S. involvement in what it considers its domestic affairs.

Implications for U.S.-China Relations

The sanctions underscore a deepening divide between the two global powers. While the penalties may have limited immediate impact on the operations of U.S. defense contractors—given their minimal reliance on Chinese markets—they signal Beijing's willingness to leverage economic and diplomatic tools to counter U.S. policies.

Moreover, these measures may further complicate the already strained U.S.-China relationship, which is marked by disputes over trade, technology, human rights, and territorial sovereignty. For Taiwan, these developments could either solidify international support or increase the risks of confrontation as the island finds itself at the heart of an escalating geopolitical rivalry.

A Test of Resolve

China’s sanctions highlight its determination to counter what it perceives as external interference in its sovereignty. For the U.S. and its defense contractors, these moves serve as a reminder of the complexities and risks involved in supporting Taiwan. With both nations refusing to back down, the geopolitical chessboard is growing ever more tense, with Taiwan caught in the middle as a crucial piece.