The Trump administration just turned up the heat on Beijing. On Friday, the Pentagon officially added some of China’s most famous companies to a watchlist of firms allegedly supporting the Chinese military. The new additions include e-commerce giant Alibaba, search engine Baidu, and electric car leader BYD. This decision comes at a sensitive time, just before a scheduled meeting between the leaders of the two superpowers.
Officials call this the “1260H list.” Getting named doesn’t trigger immediate economic sanctions, but it creates significant long-term headaches. Under a new law, the Defense Department must stop buying goods or services from these companies in the coming years. Being listed also stains a company’s reputation. It sends a clear signal to every supplier working with the US government: the American military views these Chinese firms as security risks.
The updated list covers more than just internet apps and cars. The Pentagon also targeted biotech company WuXi AppTec and laser sensor maker RoboSense. However, officials decided to cut a few companies a break. They removed memory chip makers YMTC and CXMT from the list, along with COSCO SHIPPING Finance.
Alibaba fought back immediately. A spokesperson stated there is “no basis” for the decision, insisting the company is not part of any military strategy. They even threatened to take the US government to court. This echoes earlier complaints from tech giant Tencent and battery maker CATL, who are already on the list. Both companies previously denied doing any military-related work and promised to fight their inclusion.
This latest move risks damaging a fragile trade truce that President Trump and President Xi reached in October. Despite the diplomatic risks, pressure in Washington is mounting. Lawmakers recently sent a letter to Secretary of Defense Pete Hegseth urging him to go even further. They want the Pentagon to blacklist the AI firm DeepSeek, smartphone maker Xiaomi, and display maker BOE Technology. For now, the administration is picking its targets carefully, adding pressure while removing others, but the message to Beijing is unmistakable.
