China's Commerce Ministry has threatened "forceful countermeasures" against the Pentagon following the Defense Department's inclusion of new Chinese companies, including Alibaba and Baidu, on its military company list. This decision has been criticized as an abuse of state power and a breach of agreements made by President Trump and China's Xi Jinping during their recent meetings aimed at stabilizing U.S.-China relations. The updated list doesn’t prohibit these companies from operating in the U.S. but restricts their dealings with the Pentagon and stigmatizes them amid rising concerns over Chinese espionage. The tensions highlight the Trump administration's struggle to balance strategic stability with countering perceived security threats from China, complicating efforts to repair trade relations following a tariff war.

Beijing blasts Pentagon’s latest Chinese military company list

China’s Commerce Ministry is threatening “forceful countermeasures” unless the Defense Department walks back its latest listing of alleged Chinese military companies.

The company logo is pictured during a tour at the Alibaba office in Beijing.

The company logo is pictured during a tour at the Alibaba office in Beijing on April 1, 2026. | Wang Zhao/AFP via Getty Images

By Phelim Kine06/13/2026 11:50 AM EDT

China’s Ministry of Commerce has come out swinging at the Pentagon’s move to add a new slate of Chinese companies to its list of firms deemed to be military rather than civilian.

That decision “abused state power” and “disregarded the consensus” reached by President Donald Trump and China’s leader Xi Jinping on stabilizing U.S.-China relations during their meeting in Beijing last month, the ministry said in a statement Saturday. The ministry threatened reprisals unless the Pentagon removes those firms from its military company list.

“Otherwise, China will inevitably take resolute and forceful countermeasures, and the U.S. will bear full responsibility for the resulting consequences,” the statement said.

The Defense Department’s updated 1260H list, published Monday, classified dozens of new companies and their subsidiaries, including e-commerce giants Alibaba and Baidu, and the electric vehicle manufacturer — and major Tesla rival — BYD, as “Chinese military companies operating in the United States.” The listing doesn’t bar them from operating in the U.S., but it prohibits them from doing business with the Pentagon and imposes a reputational stigma at a time of rising concerns about Chinese espionage operations. The intelligence agencies of Britain, the U.S., Canada, Australia and New Zealand warned last week that China is increasingly using professional networking sites and job platforms — including LinkedIn and Indeed — to gain access to classified information.

The tensions over the Pentagon’s Chinese military company list underscore the Trump administration’s challenge in maintaining what Secretary of State Marco Rubio describes as “strategic stability” with China while countering Beijing’s perceived threats to national security. The administration has demonstrated its willingness to yield to Beijing’s sensitivities in some areas — such as Trump’s apparent willingness to delay approval of a $14 billion arms sale to Taiwan — without pulling its punches against alleged Chinese espionage dangers.

That dynamic could complicate Trump’s efforts to restore normal U.S.-China trade ties battered by the tit-for-tat tariff war that Washington and Beijing waged against each other last year. Trump hailed the results of his May summit with Xi, in which the latter pledged to buy 200 Boeing aircraft and “billions of dollars” in U.S. soybeans. During that Beijing meeting, Trump announced he’d invited Xi to a state visit in Washington in September — at which many of the same topics will undoubtedly be relitigated.

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