June 23, 2026
SINGAPORE – US-China tensions over the use of commercial technology for military purposes have flared anew, with Beijing imposing export controls on 10 American companies, in what analysts view as a calibrated response to Washington’s expansion of a Pentagon blacklist targeting Chinese firms and their subsidiaries.
While the move is seen as largely symbolic, observers say it is notable because it targets companies at the heart of US efforts to build an independent rare earth supply chain, in addition to firms in the defence and aerospace sectors – underscoring how critical minerals remain a strategic pressure point in the broader US-China technology and security rivalry.
A Chinese Commerce Ministry spokesperson said on June 22 that the measures were intended to safeguard national interests and respond directly to the addition of dozens of Chinese entities, including tech giants Alibaba and Baidu, to a list of companies that Washington says support China’s military.
Earlier in June, this so-called 1260H blacklist – a registry of “Chinese military companies” identified by the Pentagon as operating directly or indirectly in the US – was expanded to include firms from a range of civilian industries including electric vehicles, robotics and artificial intelligence.
The US firms sanctioned by China in retaliation include defence, aerospace and technology companies such as Oshkosh Defense, Ball Aerospace, IMSAR and L3Harris Maritime Services, alongside drone makers Red Cat Holdings and its subsidiary Teal Drones. Rare earth producers MP Materials and USA Rare Earth are also on the list.
Simultaneously on June 22, China’s Finance Ministry announced government procurement bans covering 46 US firms, including subsidiaries of traditional American defence giants Lockheed Martin, General Dynamics and Raytheon.
This means Chinese government agencies are barred from buying products made by the 46 listed US firms, though analysts noted that the likes of Lockheed Martin and Raytheon are already prohibited by US law from selling military hardware and weapons systems to Beijing.
With the latest export controls, effective from June 22, Chinese exporters are barred from shipping “dual-use” items – goods or technologies that have both civilian and military applications – to the 10 US companies that have been added to Beijing’s export control list.
This restriction extends beyond China itself to third-party countries, meaning organisations and individuals from anywhere in the world are banned from routing dual-use items of Chinese origin to these companies.
Dylan Loh, who researches Chinese foreign policy at Singapore’s Nanyang Technological University, told The Straits Times that the inclusion of MP Materials and USA Rare Earth stands out as they are central to Washington’s efforts to build up a domestic rare earth supply chain and reduce reliance on China for such materials.
Chen Bo, senior research fellow at the National University of Singapore’s East Asian Institute, said the US companies being sanctioned have limited reliance on China, but Beijing’s moves signal that it is fully aware of where the critical parts of the US’ emerging supply chain lie.
Rare earths are key to a range of industrial and technological applications, such as electric vehicles, wind turbines and advanced weapons systems.
MP Materials owns and operates the Mountain Pass mine in California, the only active rare earth mining and processing site in the US. The facility accounts for more than 10 per cent of global rare earth output, making it the largest source outside China, which still dominates global supply chains – controlling more than 70 per cent of production and nearly 90 per cent of refining capacity.
Beijing response seen as calibrated, not escalatory
In July 2025, the US Department of Defense became MP Materials’ largest shareholder, overtaking China’s state-linked Shenghe Resources, which previously held a 7.7 per cent stake and was MP Materials’ sole customer.
The US government has also taken a stake in USA Rare Earth, acquiring 10 per cent in January as part of a US$1.6 billion (S$2.07 billion) investment. The company is currently developing a rare earths mine in Texas slated to open in 2028, alongside a magnet manufacturing facility in its Oklahoma base that is expected to begin operations later in 2026.
Analysts say Beijing’s response appears measured, signalling competition rather than escalation.
In Loh’s view, China’s retaliation is a “calibrated” one, shown by its decision to impose procurement bans on American defence companies even though these firms do not sell to the Chinese government to begin with.
“It would be difficult not to respond at all, but China will also be careful in overcorrecting and being perceived as severely escalatory,” he said.
Hu Xinyue, a senior analyst at the S. Rajaratnam School of International Studies in Singapore, agreed that the new export controls are a calibrated response to push back against US pressure, rather than an escalation.
Noting that Nvidia and other major chipmakers were spared, Hu said China this time chose targets that would cause some hurt without touching the most sensitive nerves in the US-China relationship.
The latest flare-up between the world’s two largest economies comes little more than a month after US President Donald Trump and his Chinese counterpart Xi Jinping held a closely watched summit in Beijing in mid-May.
While there was no official indication after the meeting on whether the two countries would extend a fragile one-year trade truce due to expire in November 2026, the two leaders had agreed on a framework of a “constructive and strategically stable” relationship that would guide US-China ties in the next three years and beyond.
Hu said the latest measures illustrate how competition and engagement now coexist under the post-summit framework.
In her view , the Trump administration has allowed the US defence and commerce departments to continue relatively hawkish sectoral actions against China, while preserving the top-level political relationship as a separate, protected channel.
Chen told ST that the latest sanctions are unlikely to change the stabilising relationship between the two superpowers. “After all, both countries showed their teeth last year, and they understand quite well that a clash is too costly to both sides,” he said.
Loh said the tit-for-tat export curbs show that the new framework agreed at the Trump-Xi summit, while welcome, is no silver bullet.
“Clearly, having stability does not mean competition will not happen. I think it also indicates that while both agree on the broad framework, there are some gaps in their respective understanding of what constructive strategic stability means in practice,” he added.