China levied sanctions on US-based defence companies Lockheed Martin and Raytheon for allegedly supplying arms to Taiwan.
In an announcement on Thursday, China’s Ministry of Commerce declared that Lockheed Martin Corp. and Raytheon Technologies Corp’s Raytheon Missiles and Defense were “unreliable” entities.
Sanction Measures
As part of the sanctions, the companies and their management are prohibited from:
- Engaging in import and export activities related to China;
- Making new investments in China;
- Entering China;
- Holding work permit, stay, and residence qualification in China;
Moreover, fines, “twice the amount of each enterprise’s arms sales contract to Taiwan,” have been imposed on the companies as well.
Lockheed and Raytheon have until two weeks to pay the fine, and a failure to do so will result in the imposition of additional fines and “other measures in accordance with the law.”
US-Taiwan Relations
Despite the absence of official relations with Taiwan, the US engages commercially and informally with the self-governing island, which China claims to be part of its own territory, to a large extent.
By law, the superpower is obligated to ensure that Taipei has the capacity to defend itself. To this end, the US is Taiwan’s main supplier of military equipment.
China put Lockheed Martin and a unit of Raytheon Technologies on an ‘unreliable entities list’ over arms sales to Taiwan, banning them from imports and exports related to China in its latest sanctions against the U.S. companies https://t.co/DtSGZckaPQ pic.twitter.com/d2PscDRmOm
— Reuters (@Reuters) February 17, 2023
Last September, Raytheon Missiles and Defence was awarded a $412 million contract to upgrade the island’s military radar. The contract fell under the US’ $1.1 billion arms sales package to the island.
Meanwhile, Lockheed Martin has sold radar, helicopters, and air traffic control equipment to the island. In addition, it helps Taipei develop its own fighter jet and navy frigates.
US Response
Commenting on the sanction on Thursday, White House Press Secretary Karine Jean-Pierre said that they were largely “unnecessary.”
“China can speak to their own actions, but, again, we see [the sanctions] as symbolic and unnecessary,” she told reporters.