China targets US rare earth and other firms with export controls

BEIJING — China has added 10 U.S. entities it says are linked to the U.S. military to its export control list, escalating trade tensions with Washington after the United States recently placed several Chinese firms on its own restricted list.

The move bars Chinese exporters from supplying dual-use items to the affected companies. Among those listed are specialized motor manufacturer Aveox, as well as rare earth producers MP Materials and USA Rare Earth.

China’s Ministry of Commerce said the decision was a response to what it described as the “malicious practice” of the U.S. government. It added that the action was intended to safeguard national security and interests, while also fulfilling international obligations related to non-proliferation.

The ministry said any ongoing export activities involving the listed companies must stop immediately.

In a separate statement, China’s Ministry of Finance announced measures against 46 additional U.S. companies. Under the new restrictions, Chinese buyers are prohibited from purchasing any products manufactured by those firms, although U.S.-funded enterprises operating in China will still be allowed to do so.

The latest actions come after the United States added several Chinese companies, including e-commerce giant Alibaba Group, search engine provider Baidu, and automakers BYD and NIO, to a list of firms Washington says are linked to or supporting China’s military.

The reciprocal measures highlight the continuing strain in U.S.-China economic relations, particularly in sensitive sectors such as technology, advanced manufacturing, and critical minerals.

-Reporting by Liz Lee and Shanghai newsroom; Editing by Edwina Gibbs / Reuters