China Imposes Sanctions on US Defense Contractors in Response to Taiwan Arms Sales
By China has imposed sanctions on two major U.S. defense contractors, Lockheed Martin Corporation and Raytheon Technologies Corp., for supplying weapons to Taiwan.[0] The sanctions, announced on Thursday, come in response to a suspected Chinese surveillance balloon entering U.S. airspace late last month, and will bar the companies from engaging in import and export activities related to China, and from making new investments there.
The sanctions also ban senior executives from the companies from entering China or obtaining work permits, and require them to pay fines twice the contract value of their arms sales to Taiwan since September 2020.[1] The Chinese government has stated that the balloon found over the United States was a civilian research aircraft accidentally blown off course.[2]
In September, Raytheon Missiles and Defense (a part of Raytheon Technologies Corp.) was awarded a $412 million contract to improve Taiwanese military radar as part of a $1.1 billion package for U.S. arms sales to Taiwan.[3] Boeing Defense was awarded a contract worth $355 million to provide Harpoon missiles.[4]
Antony Blinken, the U.S. Secretary of State, was due to travel to Beijing in order to try to improve relations between the two countries, but the incident caused him to cancel the trip.[5] Last week, the U.S. blacklisted six Chinese companies it linked to the balloon, and President Joe Biden is expected to make remarks Thursday about the Chinese balloon and the three objects that were recently shot down by U.S. jets.[1]
The escalating tensions between China and the U.S. highlight the ongoing geopolitical conflict between the two countries, as well as the importance of Taiwan for both. The U.S. is Taiwan’s main supplier of military equipment and China views it as a renegade province to be reunified, by force if necessary.[5]
The sanctions imposed on Lockheed Martin and Raytheon also take direct aim at the growing U.S. sanctions regime by creating a retaliatory framework to penalize companies that comply with U.S. sanctions. In the past, China has threatened to impose sanctions on US entities that adversely affect its national security.
It remains to be seen how Beijing will enforce the fines and what impact the penalties might have on the two companies.[6] While the United States prohibits the sale of weapons to China, some US defense contractors have ties to civilian sectors that could be impacted by the sanctions — including civilian aircraft and things like air traffic control technology.[3]
0. “China sanctions Lockheed, Raytheon after vowing to retaliate against US restrictions” Channel3000.com – WISC-TV3, 16 Feb. 2023, https://www.channel3000.com/news/money/china-sanctions-lockheed-raytheon-after-vowing-to-retaliate-against-us-restrictions/article_9697ebf5-96cb-5582-a97d-8c0faffd68f4.html
1. “China sanctions Lockheed Martin, Raytheon over Taiwan sales” Axios, 16 Feb. 2023, https://www.axios.com/2023/02/16/china-sanction-lockheed-martin-raytheon-taiwan-sales
2. “China hits back at US with sanctions on Lockheed Martin, Raytheon” The Straits Times, 16 Feb. 2023, https://www.straitstimes.com/asia/east-asia/china-hits-back-at-us-with-sanctions-on-lockheed-martin-raytheon
3. “China sanctions Lockheed Martin, Raytheon over Taiwan arms sales” Al Jazeera English, 16 Feb. 2023, https://www.aljazeera.com/news/2023/2/16/china-sanctions-lockheed-martin-raytheon-over-taiwan-arms
4. “China sanctions Lockheed Martin, Raytheon for Taiwan sales” The Washington Post, 16 Feb. 2023, https://www.washingtonpost.com/politics/china-sanctions-lockheed-martin-raytheon-for-taiwan-sales/2023/02/16/fe011756-addc-11ed-b0ba-9f4244c6e5da_story.html
5. “China puts Lockheed, Raytheon on trade blacklist over arms deals with Taiwan – Washington Business Journal” The Business Journals, 16 Feb. 2023, https://www.bizjournals.com/washington/news/2023/02/16/lockheed-martin-raytheon-china-sanctions-taiwan.html
6. “China sanctions Lockheed, Raytheon after vowing to retaliate against US restrictions” CNN, 16 Feb. 2023, https://www.cnn.com/2023/02/16/business/china-sanctions-lockheed-raytheon-hnk-intl/index.html
