China announced Thursday it would levy sanctions on American defense contractors Lockheed Martin and a Raytheon subsidiary for supplying weapons to Taiwan. The move comes shortly after the United States blacklisted half a dozen companies tied to the Chinese’s high-altitude ballon surveillance program.
China’s Ministry of Commerce barred Lockheed Martin Corporation and Raytheon Missiles & Defense from further investment opportunities or importing trade goods into the country. The companies are now listed on the “unreliable entry list,” it said in a statement.
China also prohibited the companies’ executives and other senior management personnel from entering the country. The ministry levied fines against the American contractors “twice the amount of each enterprise’s arms sales contract to Taiwan,” the statement reads.
If the companies don’t pay the fine within 15 days China promised to impose “additional fines and other measures.”
It’s not clear how impactful the sanctions will be due to the broad arms sale restrictions between American defense contractors and China.
“Lockheed Martin closely adheres to United States government policy with regard to conducting business with foreign governments. We do business with more than 70 nations around the world, and all of our international sales are strictly regulated by the U.S. government,” Lockheed Martin told Axios in a statement on Thursday.
The company further emphasized that its arms sales to Taiwan were “government-to-government transactions” and that they will continue to work closely with the U.S. government.
Washington has no official diplomatic relations with Taiwan but does maintain commercial and military connections. Federal law requires the United States to ensure Taiwan has the military equipment it needs to defend itself.
This isn’t the first time China has sanctioned American defense contractors for arms sales to Taiwan. Beijing has said that America’s supply of weapons to Taiwan threatens its national security.
Although China and Taiwan split after a civil war in 1949, the Chinese Communist Party claims sovereignty over the island and has said it is willing to retake the island by force if necessary.