China Sanctions US Military Firms Over Taiwan Arms Sales

China has imposed sanctions on 13 US military companies and six senior executives in retaliation for planned US arms sales to Taiwan, Bloomberg reports.

The move, announced Thursday by the Chinese Foreign Ministry, freezes the assets of the targeted companies and prohibits Chinese entities from conducting business with them.

The ministry stated the sanctions were a necessary response to US arms sales that “seriously interfere with China’s domestic affairs, and seriously damage China’s sovereignty and territorial integrity.” The targeted companies, many involved in drone manufacturing including BRINC Drones Inc., Shield AI Inc., and Kratos Unmanned Aerial Systems Inc., had minimal direct presence in China, leading some analysts to characterize the action as largely symbolic.

However, the Financial Times reported in October that previous Chinese sanctions against a US drone maker led to significant supply chain disruptions. This raises concerns that the current sanctions could similarly impact the affected firms. Many of the sanctioned companies participated in a trade mission to Taiwan in September.

The sanctions come amidst heightened tensions between China and Taiwan. Taiwanese President Lai Ching-te’s recent transit through Hawaii on his way to visit Pacific allies prompted condemnation from Beijing, which views Taiwan as a breakaway province. Further military drills around Taiwan are anticipated as a potential response to Lai’s stopovers. The People’s Liberation Army has already conducted two sets of such exercises since Lai assumed office in May.

The targeted US companies are at the forefront of developing advanced military technologies. Shield AI, for instance, is creating autonomous drone technology designed to operate without GPS, communications, or remote pilots – a capability specifically highlighted by co-founder Brandon Tseng during a September House Armed Services panel hearing. Tseng emphasized the importance of this technology in countering adversaries like China, Russia, and Iran, who are increasingly deploying jamming technologies and advanced air defense systems.