The sanctions prohibit Lockheed and Raytheon from engaging in import and export activities, as well as from making new investments in China, which includes Taiwan, according to China's definition
China imposed new sanctions on Lockheed Martin (LMT) and Raytheon (RTX) on Thursday in retaliation for weapons sales to Taiwan.
China's sanctions come after the United States barred several companies from participating in China's surveillance balloon programme last week. Stocks of Lockheed Martin and Raytheon fell on Thursday due to the sanctions.
According to a statement from China's Ministry of Commerce, the defence contractors have been added to the country's list of untrustworthy entities. The sanctions prohibit Lockheed and Raytheon from engaging in import and export activities and making new investments in China, including Taiwan, according to China's definition. China also revoked senior management personnel's work permits and residency qualifications.
China also fined both companies twice the amount of their arms sales contracts with Taiwan. According to the statement, contracts dating back to 2020, when China implemented its “regulations on the Unreliable Entity List,” would be subject to fines.
On Friday, the United States banned trade with several Chinese technology companies involved in the country's surveillance balloon programme. Last week, the United States shot down a suspected spy balloon that had been sailing across national airspace for eight days.
As a result, the White House blacklisted six companies that were allegedly involved in the programme. China Electronics Technology Group Corporation 48th Research Institution, Dongguan Lingkong Remote Sensing Technology, Eagles Men Aviation Science & Technology Group, Guangzhou Tian-Hai-Xiang Aviation Technology, and Shanxi Eagles Men Aviation Science & Technology Group are among the companies involved.
Following the news, LMT stock fell 1.9 per cent on Thursday, while RTX stock fell 0.5 per cent.