On Thursday, China imposed new sanctions against Lockheed Martin and Raytheon in retaliation for weapons sales to Taiwan. China's sanctions come after the U.S. last week banned several companies for their involvement in China's surveillance balloon program. Lockheed Martin stock and Raytheon stock edged down Thursday following the news.
China added the defense contractors to the country's list of unreliable entities, according to a statement from China's Ministry of Commerce. The sanctions ban Lockheed and Raytheon from engaging in import and export activities and prohibits them from making new investments in China which, by China's definition includes Taiwan. China also canceled work permits and residency qualifications for senior management personnel.
China also imposed fines on both companies, equal to twice the amount of their arms sales contracts with Taiwan, according to the statement. The fines would take into account contracts dating back to 2020 when China implemented its "Regulations on the Unreliable Entity List" guidelines.
U.S. Bans China Companies Over Spy Balloon Program
On Friday, the U.S. banned trade with several China tech companies involved with the country's surveillance-balloon program. Last week, the U.S. shot down one suspected spy balloon that sailed across national airspace for eight days.
In response, the White House blacklisted six companies reportedly involved in the program. The companies include Beijing Nanjiang Aerospace Technology, 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.
LMT stock fell roughly 1.9% Thursday following the news while RTX stock dipped 0.5%.
RTX stock is trading in a buy zone for a cup-with-handle base after breaking out at the end of November.
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