The New Trouble With China: Pentagon designates Tech Giants Alibaba, Baidu and BYD as Military Companies

Beijing Lashes Out at Pentagon's New Designation of Chinese Military Firms, 

Politico reports

Source:  POLITICO 

June 13, 2026

China’s Ministry of Commerce has responded vehemently to the Pentagon’s recent update to its list of companies identified as having ties to the military, Politico reports. The ministry accused U.S. authorities of “abusing state power” and undermining the consensus reached between President Trump and Chinese President Xi Jinping regarding the stability of U.S.-China relations during their recent meeting in Beijing.

In an assertive statement on Saturday, the Ministry of Commerce warned of “forceful countermeasures” unless the Pentagon retracts its designation of these companies, which includes well-known tech giants such as Alibaba and Baidu, as well as electric vehicle manufacturer BYD. The updated list, published by the Defense Department, now classifies these firms as “Chinese military companies operating in the United States.” 

While this classification does not prohibit these companies from conducting business within the U.S., it does restrict them from engaging with the Pentagon and carries a negative reputational impact amid increasing concerns over Chinese espionage. 

According to Politico, just last week, intelligence officials from the U.S., Britain, Canada, Australia, and New Zealand issued a warning about China’s efforts to exploit professional networking sites like LinkedIn and job platforms such as Indeed to access classified information.

The controversy surrounding the Pentagon’s designation highlights the challenges facing the Trump administration in managing strategic stability with China while addressing perceived national security threats. 

Secretary of State Marco Rubio has emphasized the importance of balancing these interests. The administration has shown a willingness to accommodate some of Beijing’s concerns, as seen in President Trump’s decision to seemingly defer approval of a significant $14 billion arms sale to Taiwan. 

This tense dynamic could present obstacles to President Trump’s efforts to mend U.S.-China trade ties, which have suffered from an ongoing trade war characterized by reciprocal tariffs. 

The positive outcomes of Trump’s recent summit with Xi, where the Chinese leader committed to purchasing 200 Boeing aircraft and investing “billions of dollars” in U.S. soybeans, were underscored during their discussions. At that Beijing meeting, Trump also extended an invitation for Xi to visit Washington in September, a visit that is likely to revisit many of the same contentious topics.