China sanctions Lockheed, Raytheon after vowing to retaliate against US restrictions

By Wayne Chang and Simone McCarthy, CNN

China has imposed sanctions on two American defense manufacturers over arms sales to Taiwan, a day after Beijing pledged to take “countermeasures” in response to Washington’s handling of a suspected Chinese surveillance balloon that entered American airspace and was shot down by US forces earlier this month.

Lockheed Martin Corporation and Raytheon Missiles & Defense, a subsidiary of Raytheon Technologies Corp, will be added to China’s sanctions list, its Ministry of Commerce said in a Thursday statement. They are banned from importing, exporting and investing in China.

Lockheed makes the F-22 Raptor fighter, the model that was responsible for shooting down the Chinese balloon off the coast of South Carolina on February 4. Raytheon makes the AIM-9X Sidewinder missile, which was used in the mission.

China has insisted that the sanctions were not related to the “unmanned airship incident.” Its Ministry of Commerce released a statement on Friday morning saying the measures were part of “normal law enforcement action” for arms sales by the two entities to Taiwan that “seriously undermined” China’s national security and territorial integrity.

The sanctions came just days after the US Commerce Department restricted six Chinese companies that it said were tied to the Chinese army’s aerospace program from obtaining US technology without government authorization.

Both Lockheed Martin and Raytheon Missiles & Defense are also subject to fines “twice the amount” of their arms sales to Taiwan dating back to September 2020, and their senior executives will be prohibited from entering and working in China.

It was not immediately clear how Beijing would enforce the fines. While the United States prohibits the sale of weapons to China, some US defense contractors have ties to civilian sectors.

“We do business with more than 70 nations around the world, and all of our international sales are strictly regulated by the US government,” a Lockheed Martin spokesperson told CNN in a statement.

Raytheon Missiles & Defense did not immediately respond to a CNN request for comment.

Beijing has previously imposed sanctions on both companies in relation to their arms sales to Taiwan, without specifying what the penalties would entail and how they would be enforced. China’s ruling Communist Party views democratic Taiwan as its territory, despite never having controlled it.

In its Friday statement, China’s commerce ministry confirmed this was the first time it had used its “unreliable entity list” to impose sanctions on two companies that sell arms to Taiwan.

Political tension has risen between the United States and China over the balloon, which Beijing maintains was a civilian research aircraft blown off course.

Washington has since accused China of overseeing an international aerial surveillance program. Beijing has denied those claims and, in turn, this week accused the United States of “illegally” flying high-altitude balloons into its airspace more than 10 times since the start of 2022, including over its western regions of Xinjiang and Tibet.

US intelligence officials are assessing the possibility that the suspected spy balloon was not deliberately maneuvered over the continental US by the Chinese government, but was diverted off course, CNN reported on Wednesday.

The incident has already sent ties into a downward spiral and resulted in the postponement of an expected visit from US Secretary of State Antony Blinken to China earlier this month. The trip was expected to help ease tension between the two powers following a meeting between US President Joe Biden and Chinese leader Xi Jinping during the G20 summit in Bali in November.

In remarks Thursday, Biden said he expected to speak to Xi following the balloon incident to “get to the bottom of this” but said he made “no apologies” for “taking down that balloon.”

The United States will continue to engage with China, he said, reiterating his position that the US seeks “competition not conflict.” The current situation “underscores the importance of maintaining open lines of communication” between US and Chinese diplomats and military professionals, Biden added.

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