China sanctions Lockheed Martin and Raytheon for selling arms to Taiwan

China‘s commerce ministry placed Lockheed Martin Corp and Raytheon Technologies Corp on an “untrustworthy entities list” on Thursday over arms sales to Taiwan, the latest sanctions imposed on the two U.S. defense contractors.

The measures come amid heightened tensions after the U.S. military shot down what it says was a Chinese spy balloon, and a day after Beijing warned of “countermeasures against relevant U.S. entities that undermine China’s sovereignty and security”.

Lockheed Martin and Raytheon Missile and Defense Corporation, a subsidiary of Raytheon Technologies, are barred from “engaging in import and export activities related to China,” according to a statement from the commerce ministry.

Beijing also barred the companies from further investment in China, barred senior management from entering the country, revoked residence permits for any employees in China, and imposed fines equal to the contracted amount of their arms sales to Taiwan.

It is unclear how China would enforce such fines, which must be paid within 15 days, according to the Chinese government.

Last February, China sanctioned the two firms over a $100 million arms sale to Taiwan, a self-ruled island that Beijing views as a breakaway province.

China has announced sanctions against Lockheed and Raytheon on at least two previous occasions, in 2019 and 2020, though Beijing has not explained what those sanctions entailed or how they were enforced.

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