US Blacklists Chinese Firms; Beijing Vows Countermeasures

China’s Ministry of Commerce (MOFCOM) has issued a forceful response to the United States’ decision to add dozens of Chinese companies—including Alibaba, BYD, Baidu, and Nio—to its “Chinese Military Company” (CMC) blacklist, warning that Beijing will take “strong countermeasures” if the measures are not revoked. The move, announced by the US Department of Defense on June 8, 2026, escalates technology and trade tensions between the world’s two largest economies just weeks after Presidents Donald Trump and Xi Jinping met in Beijing.

Background: The Expanding Blacklist

The updated list, published under Section 1260H of the National Defense Authorization Act (NDAA) for Fiscal Year 2021, expands from 134 entities in January 2025 to 188 entities across 80 parent companies—a net increase of 54. According to SCMP, the designations target a broad range of sectors including electric vehicles (BYD, Nio), e-commerce and AI (Alibaba, Baidu), solar energy (JA Solar, Trina Solar), display manufacturing (BOE Technology), biotechnology (WuXi AppTec), robotics (Unitree), and lidar technology (Hesai, RoboSense).

Malay Mail reported that the Pentagon’s latest update came months after it briefly released—then withdrew—an earlier version of the list without explanation. The new list is largely similar to the version momentarily published in February, although two memory chipmakers—ChangXin Memory Technologies and Yangtze Memory Technologies—were reinstated after having been removed.

China’s Official Response

In a statement published on June 13, 2026, a MOFCOM spokesperson expressed “strong dissatisfaction and firm opposition” to the US action, as reported by Xinhua News Agency. The spokesperson accused the US of “generalizing the concept of national security, abusing state power, and making unreasonable suppression of Chinese companies.”

“The US disregards the consensus reached at the Beijing summit between Chinese and US heads of state, ignores the overall situation of China-US economic and trade relations,” the spokesperson said. “The US practices severely undermine international economic and trade order, seriously endanger the stability of global industrial and supply chains, and severely damage the legitimate rights and interests of Chinese enterprises.”

MOFCOM warned that if the US does not immediately stop its actions and revoke the measures, “China will resolutely take strong countermeasures, and all consequences and responsibilities arising therefrom shall be borne entirely by the US side.”

What the 1260H List Actually Does

A critical distinction is that the 1260H CMC list is not the same as the US Commerce Department’s Entity List. It does not automatically trigger asset freezes, export controls, or financial sanctions. Its direct effect is a prohibition on US Department of Defense procurement from listed entities, taking effect June 30, 2026, with an extension to the entire supply chain by June 30, 2027.

However, the designation carries significant reputational and investment signaling effects. As the research notes, the “chilling effect” on investment, banking relationships, and customer confidence is the primary risk for affected companies.

Corporate Responses

Several affected companies have publicly denied any military affiliation. Alibaba stated: “There’s no basis to conclude that Alibaba should be placed on the Section 1260H List. Alibaba is not a Chinese military company nor part of any military-civil fusion strategy. We will take all available legal action against attempts to misrepresent our company.”

BOE Technology Group similarly asserted that it is “neither a Chinese military enterprise nor a civil-military fusion enterprise of China’s defense industry,” noting that the restrictions relate only to US defense procurement and do not prohibit other business activities.

Analysis: Broader Implications

This expansion represents a significant broadening of the US approach, moving beyond traditional defense and aerospace companies to encompass a wide range of civilian technology sectors where Chinese companies are global leaders. Analysts suggest this reflects deepening US concerns about China’s “military-civil fusion” strategy, which integrates civilian technological innovation with military applications.

Potential Chinese Countermeasures

China’s explicit threat of retaliation could take several forms, including:

• Antitrust investigations into US companies operating in China
• Export controls on critical minerals such as rare earths and lithium
• Anti-subsidy investigations into US products
• Counter-designation of US companies on Chinese “unreliable entity” lists

Capital Market Shifts

The blacklisting may accelerate Chinese companies’ shift away from US capital markets toward Hong Kong, Shanghai, and Shenzhen listings. Multiple companies have indicated they will pursue legal challenges to their inclusion.

What to Watch For

The immediate focus will be on whether China follows through on its threat of countermeasures and what form they take. The June 30, 2026 deadline for the DoD procurement ban is fast approaching, and affected companies are racing to assess the impact on their operations. The trajectory of US-China relations—already strained despite the recent Beijing summit—will be a critical factor in determining whether this escalation leads to a broader trade confrontation or remains contained within the framework of technology competition.

Reporting contributed by Xinhua News Agency, SCMP, and AFP.