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China to sanction US companies Boeing, Lockheed Martin, Raytheon over Taiwan arms sales

High Mobility Artillery Rocket System (HIMARS) fires during testing at White Sands Missile Range, New Mexico. (U.S. Army photo/Released)
October 27, 2020

China announced plans Monday to sanction U.S. arms makers — including Lockheed Martin, Boeing and Raytheon — over arms sales to Taiwan.

CNN Business reported that Chinese Foreign Ministry spokesperson Zhao Lijian said in a Monday press conference China will apply sanctions to “relevant US individuals and entities that played a negative role in the arms sales.”

Zhao specifically said sanctions would target Lockheed Martin, Boeing’s defense contractor business, and Raytheon.

In a statement provided to CNN Business, U.S. State Department spokeswoman Morgan Ortagus said, “We deplore Beijing’s efforts to retaliate against U.S. and foreign companies for their sales that support Taiwan’s legitimate self-defense requirements, the necessity of which has been made abundantly clear through increasingly hostile incursions by [China’s air force].”

The Chinese threat of sanctions comes a week after the U.S. formally notified Congress of the proposed sale of three advanced weapons systems to Taiwan, valued at an estimated $1.8 billion. According to the Defense Security Cooperation Agency, the arms sales to Taiwan include an approximately $1 billion package of AGM-84H Standoff Land Attack Missile air-to-ground missiles from Boeing, $436.1 million in High Mobility Artillery Rocket Systems (HIMARS) M142 Launchers from Lockheed Martin and $367.2 million in aircraft reconnaissance pods from Collins Aerospace, a subsidiary of Raytheon.

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Boeing said foreign sales of its weapons systems are coordinated through the Department of Defense.

“The U.S. government decides on which defense systems to provide Taiwan and then makes the arrangements with the Department of Defense for the provision of such equipment,” a Boeing spokesperson told CNN Business. “Foreign military sales to any country or entity is a direct contractual obligation between the purchaser and the US government/Department of Defense.”

A spokesman for Lockheed Martin also told CNN that  foreign military sales are “government-to-government transactions.”

“Lockheed Martin adheres to United States government policy with regard to conducting business with foreign governments,” a Lockheed Martin spokesperson said. “We do business with more than 70 nations around the world, and all of our international sales are strictly regulated by the US government.”

Raytheon did not respond to a CNN request for comment.

The extent of China’s proposed sanctions was not clear. The Wall Street Journal reported sanctions will likely have a limited impact as U.S. defense companies are broadly barred from making military sales to China. Lockheed Martin has sold civilian helicopters to China through its Sikorsky Aircraft Corp. unit and China has been a key market for Boeing’s sales of commercial aircraft, but China’s proposed sanctions only target Boeing’s defense arm.

China has repeatedly warned against Taiwan strengthening ties with the U.S. and Chinese warplanes flew over Taiwanese airspace as U.S. diplomat Keith Crach visited the country in September.