By Katrina Northrop
SINGAPORE -- China imposed trade restrictions on dozens of U.S. entities, including two producers of rare earth minerals, in a sign that tensions between the two countries haven't dimmed following the summit between President Trump and Chinese leader Xi Jinping.
Earlier this month, the Pentagon added a number of Chinese companies to a blacklist of entities that it said were linked to China's military. On Monday, China's Commerce Ministry responded by adding 10 U.S. defense firms to its control list, barring exports to those companies of any Chinese-made products with potential military applications.
The inclusion of two American rare earth producers -- MP Materials and USA Rare Earth -- was a particularly pointed statement from Beijing, suggesting that China sees an advantage in constraining U.S. capabilities around materials needed for advanced electronics, defense systems and renewable energy technologies. The controls also targeted other sectors tied to the military: drones, robotics and aerospace.
Rare earths have been a focal point of trade tensions between Beijing and Washington since last year, when China imposed sweeping export controls on the crucial raw materials amid a bilateral trade war. But rare earths are only one symbol of a broader weaponization of supply chains between the two superpowers, with Washington and Beijing each implementing export curbs and sanctions on the other side's technology and defense industries.
During Trump's state visit to Beijing in May, the two leaders agreed to stabilize bilateral ties and to continue talks on tariffs and commercial relations.
China's actions on Monday "likely serve to build leverage for China in the ongoing negotiations with the U.S.," said Henry Gao, a trade expert and professor of law at Singapore Management University. "In terms of the trade truce, this development introduces additional friction, but it does not necessarily derail the process."
MP Materials, which enjoys financial backing from the Pentagon, is a leading U.S. miner and processor of rare earths. Although USA Rare Earth is less established as a player in the emerging industry, both companies are aggressively ramping up capacity in an attempt to break China's stranglehold over the global supply chain of the key materials. MP Materials and USA Rare Earth didn't immediately respond to a request for comment.
China's Commerce Ministry said Monday's action was taken to safeguard national security and fulfill international obligations, such as nonproliferation. The move was a direct tit-for-tat to the Pentagon's expansion of its military companies blacklist, the officials added.
In a parallel announcement Monday, China's Finance Ministry excluded 46 U.S. companies, including Lockheed Martin, RTX and Boeing's defense division, from China's government procurement.
The Finance Ministry specifically excluded products manufactured by U.S.-invested enterprises operating within China, a carve-out that suggests Beijing is seeking to minimize damage to its own domestic manufacturing even as it targets direct U.S. imports.
Both measures take effect immediately, but aren't expected to have a big impact. Xu Tianchen, a senior economist at the Economist Intelligence Unit in Beijing, described Beijing's measures as largely symbolic, given U.S. firms' limited presence in China.
Earlier this month, the Pentagon added roughly two dozen companies to its list of Chinese businesses identified as aiding Beijing's military. These included technology giants Alibaba Group and Baidu, which have denied ties to the Chinese military.
Though companies on the blacklist are only prohibited from doing business with the U.S. military, the blacklisting constrains their operations in the U.S. more broadly, since their inclusion on the Pentagon list harms their reputations among prospective customers.
--Xiao Xiao in Beijing contributed to this article.
Write to Katrina Northrop at katrina.northrop@wsj.com
(END) Dow Jones Newswires
June 22, 2026 03:46 ET (07:46 GMT)
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