China's decision this week to impose punitive trade measures on several major US defense companies is seen as a “blow” in the run-up to President-elect Donald Trump's inauguration.
The move targets defense contractors Raytheon, Boeing, General Dynamics and Lockheed Martin, and comes as U.S.-China tensions escalate further ahead of President Trump's second term, experts say revenue It is unlikely to have a major impact.
But it could be a sign that retaliation is brewing as the two superpowers vie for economic and military influence.
Companies such as Lockheed Martin, General Dynamics, and Raytheon, which are primarily arms companies, are already tied up in China because U.S. law prohibits them from selling any munitions to China unless the current president waives the ban. I hardly do any business with them.
Bill Reinsch, a former Commerce Department official and current Scholl Chair for International Business, said these companies have non-weapons components as well, so the impact isn't zero, but they're not the core of their business, and the recent China's sanctions have become largely symbolic. Center for Strategic and International Studies, a Washington-based think tank.
“I think that's why they're doing it. It's a shot over the bow,” Reinsch told The Hill. “These are reminders to the current and incoming administrations that they have tremendous influence over supply chains and, because of their interactions with us, they also have tremendous influence on the global economy. The purpose is
He added: “This is a sign that they can make our lives as difficult as we can make theirs. Think of it as pre-emptive retaliation.”
Last week, the Chinese government added 28 companies to its export control list, banning the export of items useful for both civilian and military purposes, for the purpose of “protecting national security and interests,” according to China's Ministry of Commerce.
The company also includes Lockheed Martin Missile and Fire Control, the Raytheon/Lockheed Martin Javelin joint venture, and General Dynamics on what it calls its “list of unreliable companies” for “participating in arms sales to Taiwan.” – Added 10 companies including Ordnance and Tactical Systems.
The 10 companies will be banned from all import and export activities related to China and from making new investments in China, and their executives will be denied work permits, the ministry said.
Raytheon's parent company RTX declined to comment on the Chinese fine, while Boeing and General Dynamics did not respond.
A Lockheed Martin spokesperson told The Hill in a statement that the company “adheres strictly to U.S. government policy regarding its dealings with foreign governments.”
As Mr. Trump, a frequent critic of China, prepares to be inaugurated for a second term on January 20, Beijing has become increasingly aggressive toward American companies. Trump has repeatedly promised to impose new sanctions and tariffs on the country.
In late November, President Trump promised to impose new tariffs on products from Canada, Mexico, and China through an executive order on the first day of his second term. If implemented, the order would add 10% to current tariffs on Chinese goods.
The Chinese government has already banned exports of rare earth minerals to the US and announced an investigation into US computer chip company Nvidia, part of a back-and-forth campaign of economic retaliation between the two countries. The retaliation began during President Trump's first term after he imposed a series of tariffs and trade restrictions on China.
The Biden administration has added such penalties against Chinese companies, most recently adding more than 100 companies to the trade restriction list in early December. The move was an attempt to limit the Chinese government's ability to develop its own advanced chips for military equipment and artificial intelligence.
Sanctions, or the threat of sanctions, are frequently used to punish a country for what other countries see as bad behavior or to put pressure on an enemy without using military force, which is often an effective policy tool. Masu.
“This is a pattern we've seen for a little over a decade,” said Yun Sun, director of the China program at the Stimson Center in Washington.
He said that while certain branches of U.S. defense companies affected by China's latest retaliation don't do much business in the country to begin with, sanctions against these companies could mean China is retaliating in a symbolic way. He said it shows that there is.
He predicted that “sanctions against U.S. companies for the purpose of selling arms to Taiwan will be further strengthened,” but added that their effectiveness would be limited as their activities in China are limited or non-existent. Ta.
China has made no secret of its desire to control Taiwan. The Chinese government considers the independent islands to be part of its own territory, and has increased its military presence around the islands since the election of Taiwan's president, Lai Ching-de, in May.
Despite supplying arms and other military equipment to Taiwan, the United States maintains a “one China” policy that takes no position on the issue, angering Beijing. There is.
U.S. sanctions against defense companies “seem to be sending a signal that if they want to get tougher, they can paralyze us,” Reinsch said.
He predicted that President Trump would not respond favorably to this tactic. That's because this tactic is the same one President Trump uses against other countries, and “when they do the same thing to me, I don't usually welcome it.”
