The United States government abruptly pulled an updated Pentagon list of Chinese companies allegedly tied to China’s military shortly after it appeared online, in a move that surprised both markets and policy watchers. The update to the Defense Department’s so-called “1260H list” was posted to the Federal Register for public inspection and then replaced about an hour later with a “withdrawn” notice. The notice said an agency letter requested withdrawal after posting but gave no explanation for why the list was pulled so quickly.
The brief posting mattered because it appeared to expand the list with some of China’s biggest and most globally connected companies, including Alibaba Group Holding Ltd and Baidu Inc. The draft update included automaker BYD Co Ltd, biotech firm WuXi AppTec, and robotics sensor firm RoboSense Technology Co Ltd, while memory-chip maker Yangtze Memory Technologies Co was removed.
While placement on the 1260H list is not the same as formal sanctions, it has real consequences. Under newer legal restrictions, the United States Department of Defense would be blocked in coming years from contracting with or procuring from firms on the list—making the designation a practical red flag for government suppliers and a reputational risk for the companies involved.
The episode is politically sensitive because it comes amid a fragile thaw in U.S.–China trade relations. An update that names major Chinese champions could antagonize Beijing after a trade truce reached in October between Chinese leader Xi Jinping and U.S. President Donald Trump. President of the U.S. is expected to travel to China in April, although dates were not finalized.
Companies signaled they would fight back. An Alibaba spokesperson called any inclusion “baseless,” said the company is not a Chinese military enterprise, and threatened legal action—reflecting a pattern in which some firms have sued the U.S. government over similar designations. The list already contains other major Chinese names such as Tencent Holdings Ltd and battery giant Contemporary Amperex Technology Co Ltd, underscoring the broader U.S. push to reduce exposure to entities Washington views as supporting China’s defense-industrial ecosystem.
In short, the sudden withdrawal leaves two big unanswered questions: whether the posting was a procedural error that will be corrected and reissued, or whether the administration is recalibrating the timing of a high-profile move that could disrupt diplomacy and supply chains at a delicate moment.
