China to Sanction U.S. Companies for Arms Sales to Taiwan

China said Friday it would sanction U.S. firms that participate in arms sales to Taiwan, a retaliatory move that is expected to have minimal effect on defense companies but is likely to further complicate efforts to resolve the simmering trade dispute between Beijing and Washington.
The U.S. announced plans for sales of $2.2 billion in tanks, missiles and related military hardware to Taiwan in June, drawing the ire of Beijing, which sees such sales as interference in its sovereignty claims over the self-ruled island.
 
China’s Foreign Ministry said that the arms sales “harmed China’s sovereignty and national security” and that the sanctions were necessary to safeguard its national interests.
The sanctions coincided with Taiwan President Tsai Ing-wen’s stopover in the U.S., ahead of a visit to four Caribbean allies, a trip that has also prompted anger from Beijing.
Beijing and Washington are more than a year into a trade conflict with tariffs imposed on hundreds of billions of products on both sides. Administration officials in Washington have grown increasingly concerned in recent weeks that the arms sales to Taiwan and other national security disputes with China are souring efforts to revive trade talks.
The White House and State Department didn’t respond to requests for comment.

The U.S. moved this spring to blacklist Huawei Technologies Co., the Chinese telecommunications giant, on national-security grounds, angering Beijing and turning Huawei into a talking point between President Trump and Chinese President Xi Jinping as the two leaders tried to get trade negotiations back on track.
Mr. Trump told Mr. Xi at the Group of 20 meeting in Japan in June that Washington would allow exemptions for some U.S. firms to sell products to Huawei in exchange for large purchases of U.S. agricultural products by China, as part of a cease-fire in the trade fight.
Despite the leaders’ efforts, formal face-to-face trade negotiations have yet to be scheduled. Senior U.S. officials have signaled in recent days that they expect a drawn-out trade confrontation with China, with little prospect for a resolution in the near term.
People following the trade fight warn that the security disputes are dampening prospects for a resolution.
“While Beijing still desires a trade deal, it is not so critical to Xi that he is willing to bend on sensitive issues,” Kelsey Broderick, a China adviser with the Eurasia Group, said. “Trump’s tariff hikes and especially the U.S. export ban on Huawei has heightened nationalist sentiment in China and made Beijing more skeptical that a deal will bring a lasting ebb in
 tensions.”
The U.S. defense companies being targeted by Beijing are broadly prohibited from military sales to China. However, Abrams tank maker General Dynamics Corp. also produces Gulfstream business jets. The company has said that it makes only single-digit sales to Chinese customers. The Stinger missiles are made by Raytheon Co. , which has minimal commercial sales, mainly of cybersecurity products.
Raytheon said it operated a small professional services business in China, but didn’t comment on any impact from the proposed sanctions. General Dynamics didn’t respond to a request for comment.
Administration officials have said in recent weeks that some officials are worried that Beijing will attempt to use the arms sales as leverage for trade talks, while others, including national security adviser John Bolton, see the sale as necessary to counter Chinese aggression.The U.S. is Taiwan’s main arms supplier, but Washington has formal diplomatic ties with Beijing rather than with Taiwan, in keeping with China’s “One China” policy.
China has considered Taiwan a renegade province since 1949, when the Nationalists retreated to the island after their defeat by Communist forces in a civil war. The U.S. established diplomatic relations with Beijing in 1979, but also passed a law that year obliging Washington to help Taiwan defend itself.
Chinese foreign minister Wang Yi said Friday that the U.S. shouldn’t “play with fire” when it came to Taiwan and raised concerns over Ms. Tsai’s stops in the U.S., saying Beijing was firmly opposed to any form of official contact between the U.S. and Taiwan.
Mr. Trump broke with decades of U.S. policy when as president-elect in 2016 he spoke by telephone with Ms. Tsai, infuriating the Chinese government. But the dispute receded after Mr. Trump took office and turned his attention to trade with China—and using punitive tariffs in an attempt to pressure Beijing into negotiating a trade deal more favorable to Washington.
As trade tensions and tariffs escalated in the following months, Taiwan resurfaced as a flashpoint.
A State Department diplomat’s goodwill visit to Taipei in March 2018 drew a rebuke from Beijing and angered Mr. Trump, who questioned what U.S. diplomats were doing in Taiwan, according to a person familiar with the incident. Mr. Trump requested that no further diplomats travel to Taiwan while he was working a trade deal.