Pentagon Adds BYD, Alibaba and Baidu to List of Chinese Military Companies

The U.S. Department of Defense has updated the list of companies that U.S. security agencies are barred from doing business with. The new additions include automaker BYD, e-commerce giant Alibaba and tech company Baidu. The reason given is that they help the Chinese regime exploit technology for military purposes. The decision is expected to hurt the companies' ability to do business with civilian firms in the United States.

The Pentagon said today, Wednesday, that it is classifying the three Chinese giants BYD, Alibaba and Baidu as Chinese military companies. The decision, the first details of which were published earlier this week, adds the electric vehicle maker, the tech giants and other Chinese companies to a list of nearly 200 firms deemed linked to the Chinese military. The Defense Department based its decision on the claim that the companies help the Chinese regime use civilian technology for military purposes.

The decision means that U.S. security agencies are barred from doing business with the companies starting at the end of the month. In June 2027, the restriction will be expanded to indirect procurement as well, meaning the Pentagon will prohibit dealings with U.S. companies that use these Chinese firms as suppliers. That is expected to lead to a broader severing of business ties with them.

The decision does not at this stage restrict American consumers from buying from the Chinese companies or using their services, and BYD does not market cars in the United States anyway. However, the history of the list shows that entry onto it is often only a stopover. Companies previously added to it, such as the Chinese tech giant Huawei, later found themselves facing much harsher commercial bans. CNBC cited experts who assessed that the current restrictions may be only the first step, and that American businesses working with the Chinese companies are already weighing their options.

According to assessments, the timing of the updated list is not accidental, coming less than a month after U.S. President Donald Trump met with his Chinese counterpart Xi Jinping and the two declared a trade truce. "The meeting did not stop the competition, it clarified where it will continue," Craig Singleton, an expert on U.S.-China relations at the Foundation for Defense of Democracies, told the Financial Times.

In fact, the decision to expand the list of banned Chinese companies was already published in February, but the Pentagon withdrew it within an hour without explanation. According to the Financial Times, the assumption at the time was that Trump did not want problematic headlines ahead of his expected visit to Beijing. The new list is almost identical to the one published then, with one major difference, Chinese memory chip makers CXMT and YMTC, whose absence from the list drew sharp criticism in Washington at the time, have now been included.

All the companies added to the blacklist rejected the American allegations that they help the Chinese military. Alibaba said there was "no basis" for its inclusion and said it would take legal action. Baidu said the allegation was "completely baseless," and BYD said there was "no justification" for its inclusion. The Chinese government also responded sharply, with the spokesperson for the embassy in Washington calling on the United States to "stop the wrong practice and create a fair environment for Chinese companies."

The American decision does not directly affect Israel, although some of the Chinese companies have a significant presence in Israel, especially BYD, which surpassed Tesla in the race to become the world's largest electric vehicle maker. In Israel, BYD cars were previously purchased by the police, while other Chinese automakers supply vehicles to permanent IDF personnel and to the security team at the Kirya base in Tel Aviv.