At a time when Sino-US relations are tense, the Chinese Ministry of Commerce suddenly took severe sanctions against six American companies on September 25, 2025. This move can be described as "brutal," directly targeting the core businesses and supply chains of these companies, sending out a strong signal of retaliation. The sanctioned companies include Huntington Ingalls Industries, Flat Earth Management, Global Dimensions, Saronic Technologies, Alcon, and International Marine Engineering.

All of these companies are related to a key reason: involvement in arms sales and military technology cooperation with Taiwan. This action is not only a precise counterattack against the US's continued arms sales to Taiwan, but also aims to cripple these American companies by limiting their supply chains, making them unprofitable and creating significant deterrence.

China's recent sanctions are divided into two categories, applying export controls and the Unreliable Entity List to different companies. Essentially, both methods aim to "cut their roots" by restricting supply chains. The first three companies have been placed on the export control list, prohibiting China from exporting dual-use items (items and technologies that serve both civilian and military purposes) to them. This means these companies will no longer be able to obtain critical raw materials and technical support from China. The latter three have been added to the Unreliable Entity List, which not only prohibits related import and export activities with China but also forbids them from making new investments within China, directly cutting off their business chains in China.

The power of these supply chain restrictions lies in China's dominant position in key material sectors globally. Especially in controlled export items such as rare earth magnets, gallium, and germanium, China controls over 80% of the global supply. These materials are essential "lifelines" for high-tech military industries, widely used in electronic devices, missile systems, radar, and naval vessel manufacturing.

For example, rare earth magnets are used in precision motors and sensors, while gallium and germanium are applied in semiconductor and optoelectronic technologies. Without these, China's "chokehold" could cause production lines of American companies to stall, leading to soaring costs and ultimately making them unprofitable. This is not just a simple trade barrier, but a strategic strike, forcing American companies to make difficult choices between political pressure and commercial interests.

These companies' businesses rely heavily on global supply chains, especially those related to China. For example, Huntington Ingalls Industries, the largest American military shipbuilder, is responsible for building aircraft carriers, submarines, and warships. These projects involve large amounts of rare earth and semiconductor materials. Once the supply chain is disrupted, the company may face greater crises: delays in warship projects, skyrocketing costs, and even affecting the overall deployment of the US Navy.

Flat Earth Management and Global Dimensions provide engineering and intelligence services supporting US military activities in the Indo-Pacific region, including military cooperation with Taiwan; Saronic Technologies focuses on unmanned surface vessels, Alcon provides satellite communications, and International Marine Engineering is involved in underwater infrastructure—these all directly serve arms sales and technology transfers to Taiwan.

In the future, these companies are likely to suffer heavy losses. In the short term, the disruption of the supply chain will lead to production stagnation; in the long run, investor confidence will waver, stock prices will fluctuate, and they may even be forced to exit related markets. The Chinese Ministry of Commerce emphasized that such sanctions will become routine, targeting any actions that damage China's sovereignty. This not only strikes individual companies but also amplifies to the entire US defense industry, making American companies "think twice" before engaging in issues involving Taiwan.

Behind this move, there is a deeper intention. China wants to let the US government realize that if it continues to sell weapons to Taiwan, it will gain nothing at all.

In recent years, the US has increasingly intensified its arms sales to Taiwan. Its hidden agenda is to maintain influence in the region through this "low-cost, high-impact" approach. However, China is retaliating, breaking this illusion by leveraging its absolute advantage in the supply chain. Experts analyze that such sanctions will have a chain reaction: American companies, due to commercial losses, will lobby the government, and the US government will face internal pressure, eventually possibly adjusting its policy toward China.

In today's highly integrated global supply chain, China's "harsh" actions reflect a firm defense of national security and sovereignty. This signal is clear and strong: any actions that challenge China's core interests will come at a high cost. In the future, Sino-US rivalry may enter a new phase, and the US must weigh whether it is worth continuing to "add fuel to the fire."

Original: https://www.toutiao.com/article/7554202909697720872/

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