On June 8, 2026, the Pentagon released a significant update to the Section 1260H of the NDAA 2021 List, flagging 188 companies as linked to the Chinese military. The updated list expands to include companies such as Baidu, Alibaba, Robosense Technology, and electric car maker BYD. They join previous companies on the list largely in aerospace and defense and technology, such as DJI and Huawei, 360 Security Technology, Inc, and Tencent Holdings.
The Section 1260H CMC List flags Chinese military companies operating directly or indirectly in the United States. The list continues to evolve since its initial release, including additions that were made in February but were quickly removed. These new updates include many of those from February’s brief update. There also have been removals since 2021, including YMTC and Hesai Technology Company , highlighting the importance of closely monitoring these lists.
With these additions, China’s dominant AI companies are designated as supporting the People’s Liberation Army (PLA). It also targets BYD, which surpassed Tesla as the largest EV seller earlier this year. The list does not carry legal repercussions, but does pose reputational and security risks, and can impact whether a company can contract with the U.S. military.
At last month’s Xi-Trump summit, there were some signs of stabilization in the relationship between the world’s largest economies, largely in agriculture, but they did not address the status of the trade truce that is set to expire in November. The 1260H CMC list announcement joins the recent Section 301 tariff announcement, which would introduce new tariffs under the Trade Act of 1974, and includes an increase on tariffs on Chinese goods due to a failure to enforce a prohibition on the importation of goods made with forced labor. While the tariffs pertain to 60 countries, the 12.5% that would be imposed on China, coupled with the 1260H CMC list updates, have already been negatively received by China.
For U.S. companies, the House of Representatives Select Committee on China recommends, “their products should be removed from supply chains our country depends on.” Furthermore, if recent history is any indication, China may retaliate with the addition of U.S. companies to its own entity list. It could also opt to elevate export bans on critical minerals, which have gone back and forth since 2024, and sparked a range of global agreements to decouple from Chinese critical mineral dependency. In short, this latest update must be viewed in the broader context, monitoring for subsequent responses and potential escalation, and is yet another indication of the supply chain warfare underway that is transforming global supply chains.