China has stepped up its response to the United States by increasing sanctions on American defence companies. Today, Beijing announced a second round of sanctions on ten US firms in less than a week. The reason behind this is the sale of arms to Taiwan.

China has now sanctioned or penalized a total of 45 US entities. This includes 17 companies that have been sanctioned, while 28 other entities have been added to an export ban list. Some of the largest defence manufacturers in the world, including subsidiaries of Lockheed Martin, Raytheon, and General Dynamics, are among those sanctioned today. China's Ministry of Commerce said that Beijing has placed all ten American companies on its "Unreliable entities list" for "participating in selling of arms to Taiwan." Additionally, it said that these companies will "be prohibited from all import and export activities" in the nation going forward. They won't be permitted to make investments in China either.

The Chinese government has also banned senior management from entering the country. This action against US companies comes just six days after similar sanctions were imposed on seven other companies, including a subsidiary of Boeing Defense called Insitu. Taiwan, officially known as the Republic of China, is a major point of tension between Beijing and Washington. China claims Taiwan as part of its territory, while Taiwan sees itself as an independent nation. Although China is a communist country, Taiwan operates as a democracy. China has not ruled out using force to take control of Taiwan. Even in his New Year's Eve speech, Chinese President Xi Jinping warned anyone who tries to stop this from happening. In addition, China has conducted three rounds of significant military exercises since President Lai Ching-te took office in Taiwan in May following a democratic election.

Washington views Taiwan as an important ally in Asia, and the United States is Taiwan's biggest supplier of weapons. The U.S. has long supported defending democracy over communism, a stance that was central during the Cold War with Russia. To show its commitment to protecting Taiwan, U.S. President Joe Biden approved $571 million in defence aid to Taiwan less than a month ago. Beijing claims that "such actions (by US firms) interfere in China's internal affairs, and undermine China's sovereignty and territorial integrity," despite Taiwan's sovereignty being claimed by both China and Taiwan.

In addition to the sanctions, China has penalised 28 US companies, mainly defence-related, by adding them to its Export Control List. This means these companies will permanently be banned from receiving dual-use items from China. Those included "to safeguard national security and interests, and fulfil international obligations such as non-proliferation" were General Dynamics, Lockheed Martin Corporation, and Boeing Defense, Space & Security, according to the ministry.