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China to ban imports and exports by Lockheed, Raytheon over Taiwan arms sales

China is moving to block all imports and exports involving U.S. defense contractors Lockheed Martin and Raytheon in retaliation for their arms sales to Taiwan.

China announced new details about sanctions it imposed on U.S. defense contractors Lockheed Martin and Raytheon earlier this year over their continuing arms sales to Taiwan.

The People’s Republic of China regards Taiwan, a self-governing democracy, as a rogue province and has threatened to "reunify" it with the mainland by force if necessary — a task that would be easier if it were able to convince American arms manufacturers and policymakers to cut off weapons sales to Taiwan.

China’s commerce ministry announced Tuesday that the sanctions against Lockheed Martin and Raytheon feature a ban on exports and imports by the two companies from and to China as a means "to prevent Chinese products from being used in their military business."

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The agency added that Chinese firms need to "strengthen their due diligence and compliance system construction to verify transaction information" and should refrain from knowingly conducting business with the two companies whether it comes in the form of importing, exporting, or transporting products

Taiwan sources a significant portion of its military equipment from the U.S. and China first announced sanctions against Lockheed Martin and Raytheon Missile and Defense Corporation — a subsidiary of Raytheon — in February after the latest announcements of arms sales to Taiwan. It marked the fourth time China has sanctioned the two firms, although Reuters noted that in the three prior instances Beijing didn't provide details about the restrictions and their enforcement.

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Lockheed Martin has supplied Taiwan with F-16 fighter jets, radars, and air defense missiles in addition to other equipment in recent years. 

Raytheon has provided missiles, radars and other defense articles to Taiwan. 

The two companies have also formed a joint venture to produce Javelin anti-tank missiles, which Taiwan has acquired.

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Both Lockheed Martin and Raytheon were already prohibited by U.S. law from selling military equipment to China, but the sanctions could impact any civilian business the companies do in China. Lockheed Martin has sold air traffic control equipment for civilian airports and helicopters for commercial use in China.

It’s unclear what impact those companies obtaining exports from China could be. China’s role as a leading global exporter of rare earth minerals may pose a challenge, although the level of exposure to China the two defense contractors’ supply chains have for those materials is unknown.

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China’s sanctions against Lockheed Martin and Raytheon will also prohibit a number of senior executives from traveling to China or working there. 

The list of sanctioned executives includes Lockheed Martin CEO James Taiclet, COO Frank St. John, and CFO Jesus Malave, plus Raytheon Missiles and Defense President Wesley Kremer and Vice presidents Agnes Soeder and Chander Nijhon.

FOX Business’ Greg Norman and the Associated Press contributed to this report.

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