China's Ministry of Commerce on Monday placed 10 American industrial suppliers on its export control list, including the Washington-backed rare-earth miners MP Materials and USA Rare Earth, barring Chinese firms from shipping any dual-use items to the companies. A separate Finance Ministry order the same day excluded 46 U.S. companies, most of them defense contractors, from Chinese government procurement.
The twin measures answer the Pentagon's decision earlier this month to expand its 1260H roster of Chinese companies it accuses of aiding the People's Liberation Army, an update that added Alibaba, Baidu and the carmaker BYD. Beijing's response widens the rare-earth front of the U.S.-China trade fight at a moment when Washington is still scrambling for non-Chinese supply.
What was hit
Alongside MP Materials and USA Rare Earth, the export control list named drone makers Teal Drones and Jaia Robotics, the California electronics manufacturer Aveox, Ball Aerospace & Technologies and the military-vehicle builder Oshkosh Defense. Foreign-funded entities that are locally registered and tied to the 46 procurement-barred firms were exempted from the Finance Ministry order.
The 1260H designation does not carry immediate sanctions. It bars the Defense Department from awarding direct contracts to listed companies starting June 30, with restrictions on indirect procurement set to follow in 2027, and tends to deter other federal agencies and commercial partners from doing business with the named firms. Several designated Chinese companies have disputed the label and pledged legal action; Xiaomi won a court challenge that removed its designation in May 2021.
On the Street
Rare earths have become a recurring flash point since China briefly restricted U.S.-bound exports last year in response to President Trump's tariffs, a move Semafor reported sent "a shudder across many American industries" and prompted Washington to seek alternate suppliers. Experts cited by the outlet warn that reducing U.S. reliance on China, which dominates the industry, could take years.
Han Shen Lin, China country director at the consultancy The Asia Group, told CNBC that Monday's countermeasures look largely symbolic because most targeted companies have "little or no meaningful business exposure in China." Dan Wang, China director at Eurasia Group, called the package a "model example" of how Beijing intends to answer mild U.S. escalation while keeping the broader relationship stable after last month's Trump-Xi summit.
The caveat
Chinese officials had not publicly elaborated beyond the ministry orders, and no U.S. company on either list had issued a public response by press time. Both sources used for this report are wire-style outlets; reaction from the Pentagon, the targeted firms and their congressional defenders was not available in Monday's reporting.
The next pressure point arrives June 30, when the Pentagon contracting bar on the newly listed Chinese firms takes effect, followed by the broader 2027 procurement restrictions that will test how durable the post-summit truce really is.