Baidu, a leading Chinese search engine. [Reuters=Yonhap News Agency file photo]

The U.S. Donald Trump administration stated on the 22nd (local time) that China's sanctions on U.S. defense companies and others were tantamount to admitting the untrustworthiness of Chinese suppliers.

Responding to Yonhap News' inquiry about the initiation of sanctions against U.S. companies by China's Ministry of Commerce and Ministry of Finance, a U.S. administration official replied, "Beijing's response is merely an acknowledgment of the assessment that 'Chinese suppliers are untrustworthy.'"

The official emphasized, "The U.S. Department of War's (Department of Defense) 1260H procurement regulation is intended to help ensure a secure and reliable supply chain for the U.S. military."

The 1260H procurement regulation is a provision of the National Defense Authorization Act (NDAA) that allows the U.S. Department of Defense to compile and manage a list of Chinese military companies determined to be supporting the Chinese military (People's Liberation Army).

On the 8th, the Department of Defense added 188 entities, including Chinese tech giants Alibaba and Baidu, and electric vehicle manufacturer BYD, to this list, stating they are "Chinese military companies operating directly or indirectly within the United States." While immediate sanctions are not in effect, there is a high possibility of facing disadvantages in future government procurement projects.

The Chinese Ministry of Commerce announced the previous day that it would control the export of dual-use items to 10 Chinese companies related to defense, drones, and rare earth elements. The Ministry of Finance also announced the exclusion of 46 U.S. defense companies, including Lockheed Martin, General Dynamics, Raytheon, and Boeing, from Chinese government procurement.

This action by China is seen as a retaliatory measure after the U.S. previewed disadvantages for Chinese advanced industrial companies, targeting U.S. defense and rare earth companies. The U.S. official's response is interpreted as asserting the legitimacy of its own measures and a commitment to exclude "unreliable" Chinese companies from government supply in the future.