China decided to sanction U.S. military giant companies Lockheed Martin and a unit of Raytheon Technologies on an “unreliable entities list” after the two entities took part in arms sales to Taiwan. The sanctions result in a ban on imports and exports related to China.
The new sanctions come after a series of U.S. military actions regarding the Chinese spy balloons. After that events, China promised to use “countermeasures against relevant U.S. entities that undermine China’s sovereignty and security”.
As a result of that move Lockheed Martin Corp LMT.N and Raytheon Missile and Defense Corp, a subsidiary of Raytheon Technologies Corp RTX.N, are both banned from “engaging in import and export activities related to China,” as announced in the statement of China’s commerce ministry.
China has imposed sanctions on two American defense manufacturers over arms sales to Taiwan https://t.co/eygf9FW8Vs
— CNN International (@cnni) February 16, 2023
It is worth reminding that neither of those companies sells defense products to China.
Raytheon did not comment on the situation. Raytheon Technologies used to sell its Pratt & Whitney aircraft engines, landing gear and controls, to China’s commercial aviation industry.
Lockheed Martin, a global exporter selling its products to some 70 countries, addressed the situation in a statement.
“Foreign Military Sales are government-to-government transactions and we work closely with the U.S. government on any military sales to international customers. Lockheed Martin closely adheres to United States government policy with regard to conducting business with foreign governments,” Lockheed’s statement says.
The fighter family – always one step ahead. 💪
Our aircraft continue to deliver, keeping the U.S. and our allies safe. pic.twitter.com/FL9YeaoZWW
— Lockheed Martin (@LockheedMartin) February 14, 2023
It was Lockheed’s F-22 Raptor fighter jet to destroy the alleged Chinese spy balloon over South Carolina, using the AIM-9X Sidewinder missile produced by another sanctioned company – Raytheon.
The Chinese government also decided to forbid any further investment of those entities in China, senior management will not be able to enter the country, and all resident permits for staff residing in China are canceled. It also put financial penalties amounting to twice the worth of the company’s arms sales to Taiwan.
The fines are to be paid in 15 days, but it is not clear how China intends to execute its decision.
China has announced sanctions against Lockheed and Raytheon on at least two previous occasions but it never cleared what was the sanction regime or how they shall be enforced.
U.S. weapons sales angered China since the 1979 commitment expressed in the Taiwan Relations Act, which obliges the U.S. to support the island with military equipment.