The Defense Department’s updated 1260H list imposes procurement restrictions starting this month, pressuring supply chains for US contractors.
The Pentagon added Alibaba, Baidu, BYD, and four other Chinese firms to its 1260H list, barring direct Defense Department contracts from later this month. Third-party procurement restrictions will follow in June 2027, creating supply chain challenges for US defense contractors already working with the listed companies.
The move reinstates memory chipmakers CXMT and YMTC, which were omitted from a February draft ahead of former President Trump’s China visit. The updated list reflects persistent security concerns in Washington despite recent diplomatic efforts, including a joint US-China investment and trade board announced after the Trump-Xi summit.
Baidu ADRs dropped 2.1% on the news, while Alibaba and BYD shares fell 0.8% each. The designations stop short of sanctions or export blacklists but signal heightened scrutiny of Chinese firms linked to military activities.