China’s Commerce Ministry announced new trade restrictions on Wednesday, targeting over a dozen U.S. defense firms after President Donald Trump followed through on his pledge to impose an additional 50% tariff on Chinese imports.
Beijing placed 12 U.S. companies on a control list restricting the export of dual-use items and added another six to its “unreliable entities” list, which allows punitive actions against foreign businesses, according to ministry statements.
Additionally, China said it would increase tariffs on U.S. goods by 50%, adding to the previously announced 34% hike set to take effect Thursday, bringing the total additional duties on American imports to 84%.
The latest round of trade restrictions, also effective Thursday, mainly targets U.S. firms supplying the Pentagon and federal agencies, further expanding the list of roughly 60 American companies Beijing has already penalized in response to Trump’s tariffs, which were first implemented in February.
Regarding the unreliable entities list, the ministry stated that the six newly added U.S. firms were involved in arms sales and military cooperation with Taiwan. As a result, they are banned from China-related import and export activities, as well as from investing in the country.
“In recent years, the six companies, including Shield AI and Sierra Nevada Corporation, have… seriously jeopardized China’s national sovereignty, security, and development interests,” the Commerce Ministry said in its statement.
Shield AI, based in California, specializes in AI-powered aircraft, particularly military drones, while Sierra Nevada Corporation, a longtime contractor for the Pentagon and NASA, was selected last year by the U.S. Army to convert a fleet of business jets into advanced surveillance planes.
Though these firms have minimal business operations in China, according to a Reuters review of corporate records, the newly imposed restrictions could disrupt their supply chains.
For instance, when U.S. drone manufacturer Skydio was sanctioned by Beijing in October over arms sales to Taiwan—an island China claims as its own—it immediately lost access to Chinese-made batteries, as reported by the Financial Times.
Despite Beijing’s countermeasures against Trump’s tariffs, it has simultaneously sought to reassure foreign businesses operating in or considering investment in China.
In its statement on Wednesday regarding the unreliable entities list, the Commerce Ministry emphasized that the list applies only to “a very small number” of companies and assured that “foreign entities that are honest and law-abiding have nothing to worry about.”
