Description: The Pentagon added automakers BYD and NIO, Chinese e – commerce giant Alibaba and internet search provider Baidu to its blacklist as it determined that these companies were increasingly supporting the efforts of the Chinese military. China discredited the labeling, claiming the companies were unreasonably suppressed and the US was using erroneous market practices to stifle their industrial growth. Other companies on the Pentagon’s list also included Chinese chip maker YMTC, biotech company WuXi AppTec, AI – robotics manufacturer RoboSense Technology Co. Ltd. and Unitree, the leading Chinese producer of humanoid robots. The list, known as Section 1260H, doesn’t explicitly sanction these companies, however, it prohibits US companies and other business entities from engaging in commercial practices with the companies from the list. In the second quarter of the year, China marked a significant rise in exports of 19.4% compared to last year, while imports were also increased to 27.4% compared to 25.3% last year.
Impact: China’s surpassing of the second quarter economic projections, coupled with its successful absorption of the market fluctuations caused by the war in Iran, likely prompted the US to intensify the bilateral trade war by sanctioning several large companies and label them as military facilitators. The move follows a greatly sterile Xi – Trump summit, where no progress was made on any substantial trade or geopolitical field, which indicates that the current cold trade war ceasefire would remain in place in the mid to long – term. The blacklisting of the companies is likely an economic containment measure imposed by the US, as the country is attempting to backstop China’s evident economic progress on the global geopolitical and geoeconomic landscape. Since the list doesn’t specifically entail that sanctions on the added Chinese companies would be imposed, the measure is highly likely a warning to China’s national market expansion on the global stage. China’s increased numbers in both imports and exports demonstrate the country’s consolidated approach to global crises and likely positions China to be able to absorb further economic disruptions in the short to mid – term. The US would highly likely increase sanctions, restrictions and impose other commercial bans as both countries are currently positioning for a prolonged trade standoff in the mid to long – term.