China Imposes Sanctions on US Military Contractors over Taiwan Arms Sales. China has taken steps to isolate Taiwan by imposing trade and investment sanctions on two US military contractors, Lockheed Martin and Raytheon Missiles and Defense. The companies have been added to the “unreliable entity” list, which restricts their activities as their actions may endanger national sovereignty, security or development interests. This move comes as part of China’s efforts to claim Taiwan as its territory.
The impact of the sanctions is unclear. While the US has strict restrictions on the sale of weapons-related technology to China, some military contractors have civilian businesses in other markets. Taiwan and China have been split since 1949, but the Chinese Communist Party claims that Taiwan is part of its territory and must be united with the mainland, by force if necessary.
In recent times, the Chinese government has stepped up its efforts to intimidate Taiwan by flying fighter jets and bombers near the island and firing missiles into the sea. The United States has no official relations with Taiwan but maintains extensive commercial and informal contacts. According to federal law, the US is obligated to ensure that the island’s government has the means to defend itself.
Raytheon Missiles and Defense was awarded a $412 million contract in September 2022 to upgrade Taiwanese military radar, and Boeing Defense received a $355 million contract to supply Harpoon missiles. In response, Beijing announced sanctions against the CEOs of Raytheon and Boeing Defense but gave no details about what they were.
Lockheed Martin has supplied Taiwan’s military with radar, helicopters and air traffic control equipment. It also plays a role in the development of Taiwan’s own fighter jet and navy frigates. Meanwhile, in China, Lockheed Martin has sold air traffic control equipment for civilian airports and helicopters for commercial use.
This move comes in response to the US restrictions imposed on Huawei Technologies Ltd., a Chinese maker of telecom equipment, in 2019. With this latest move, China is escalating tensions with the US, which could have serious implications for trade and diplomatic relations between the two countries.