China's Foreign Ministry announced sanctions on 26 December 2025 against 20 US defence firms and 10 senior executives in direct response to Washington's recent approval of an unprecedented $11.1 billion arms package to Taiwan.

The measures, enacted under China's Anti-Foreign Sanctions Law, immediately freeze all movable and immovable assets held by the targeted entities within China.

Domestic organisations and individuals in China face prohibitions on any transactions, cooperation, or other activities with these firms and executives. The 10 individuals, including Anduril Industries founder Palmer Luckey, also receive entry bans to China, encompassing Hong Kong and Macao.

Among the sanctioned executives are John Cantillon of L3Harris Maritime Services, Michael J. Carnovale of Advanced Acoustic Concepts, and Anshuman Roy of Rhombus Power Inc.

The list of companies encompasses major players such as Northrop Grumman Systems Corporation, Boeing's St. Louis branch, Gibbs & Cox Inc., VSE Corporation, and drone specialists like Teal Drones Inc. and Red Cat Holdings Inc.

Further targets include counter-drone firms Epirus Inc., Dedrone Holdings Inc., and ReconCraft, alongside Blue Force Technologies, Dive Technologies, and Lazarus Enterprises Inc.

This action follows the US State Department's notification last week of the record $11.1 billion sale, comprising eight packages for rocket systems, missiles, drones, and artillery to bolster Taiwan's asymmetric warfare capabilities.

The Pentagon described the package as advancing US national security interests by aiding Taiwan's military modernisation amid evolving regional threats.

Beijing condemned the sales as grave violations of the one-China principle and the three China-US joint communiqués, labelling them interference in its internal affairs.

A ministry spokesperson emphasised that the Taiwan issue constitutes the core of China's core interests and the foremost red line in bilateral relations. China vowed resolute countermeasures against any provocative moves that cross this line, urging Washington to halt efforts to arm the island.

The sanctions reflect escalating tensions in the Taiwan Strait, where China claims the democratically governed island as its territory—a stance Taipei firmly rejects.

US law mandates provision of defensive arms to Taiwan, yet these transactions persistently strain Sino-US ties.

Taiwan welcomed the package, stating it enhances self-defence and asymmetric deterrence to preserve regional peace.

The Trump administration's approval underscores a strategic pivot towards mobile, precision-guided systems for Taiwan, countering Beijing's intensifying military drills and carrier transits.

These countermeasures, effective from 26 December 2025, signal China's readiness to impose economic costs on US defence sectors reliant on its vast market.

While the immediate impact on sanctioned firms remains asset-dependent, the bans could disrupt supply chains and partnerships in China. Broader implications may deter future US arms approvals and test bilateral dialogues under President Trump's second term.

Observers note this as part of a pattern, with prior Chinese sanctions on US entities over Taiwan sales proving largely symbolic yet escalatory.

Based On Reuters Report

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