China hits back at US arms deal with new sanctions on defence firms

China has slapped sanctions on a swathe of US defence companies and senior executives, escalating its response to Washington’s latest weapons sales to Taiwan and sharpening an already tense standoff over the self-governed island.

Beijing’s Ministry of Foreign Affairs said on Friday that it was targeting 20 US defence firms and 10 individuals in retaliation for the newly announced $11.1bn US arms package for Taiwan, one of the largest such deals in years.

“Any provocative actions that cross the line on the Taiwan issue ‌will be met with a strong ⁠response from China,” the ministry said, calling on Washington to halt what it described as “dangerous” efforts to arm the island.

The sanctions include asset freezes in China and bans on cooperation with Chinese organisations and individuals. Among the companies named are Boeing’s St Louis branch, Northrop Grumman Systems Corporation, L3Harris Maritime Services and Lazarus AI.

China will also seize any China-based assets held by sanctioned individuals and bar them from entering the country, the ministry said. Those targeted include the founder of defence firm Anduril Industries and nine senior executives linked to the sanctioned companies. The measures came into effect on December 26.

The move carries potential commercial implications beyond the defence sector. Boeing, for example, has reportedly been in talks about selling up to 500 commercial aircraft to Chinese airlines, a deal that could reopen the world’s second-largest aviation market after years of US-China trade friction.

Washington quickly pushed back. A US State Department spokesperson said the United States “strongly” objects to “Beijing’s efforts to retaliate against US companies for their support of US arms sales that support Taiwan’s self-defence capabilities”.

The spokesperson also urged China to engage with Taiwan through dialogue rather than ramp up “military, diplomatic, and economic pressure”.

Under US law, Washington is required to help Taiwan maintain the capacity to defend itself. But arms sales to the island, which Beijing claims as part of its territory, remain one of the most volatile flashpoints in US-China relations.