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The Pentagon has updated its annual 1260H list and has added 188 Chinese entities, including Alibaba, Baidu and BYD, and reinstated memory chipmakers CXMT and YMTC. Beijing has protested and several listed companies have rejected the designations. The change will bar the Defense Department from direct contracts with listed firms this month and from third‑party purchases from 2027.
China has repeatedly opposed the United States’ broad definition of national security as the Pentagon adds more Chinese firms to a sanctions list. The move comes after Trump and Xi held talks in Beijing and could signal tougher lines ahead in U.S.-China tech competition.
China has placed 10 US companies, including rare‑earth producers MP Materials and USA Rare Earth and several drone makers, on its export control list, barring Chinese companies from selling dual‑use items to them. Beijing has also excluded 46 US firms from government procurement, and has framed the moves as retaliation for a recent Pentagon blacklist of Chinese companies.
Alibaba has filed a federal lawsuit arguing that the DoD’s 1260H designation labeling it a Chinese military-society link is baseless. The suit seeks removal from the list and challenges the process as unfair. Several other Chinese firms face similar actions as the government moves to tighten tech controls amid U.S.-China tensions.