Pentagon expands list of China military-linked firms to include Alibaba, Baidu in fresh blow to diplomatic thaw

A general view of the office building of Baidu is in Pudong, Shanghai, on Feb. 9, 2026. Ying Tang | Nurphoto | Getty Images The Pentagon added a slew of Chinese companies, including Alibaba Group , Baidu Inc and carmaker BYD , to a list of entities it believes have aided the Chinese military, complicating the fragile diplomatic relationship between Washington and Beijing. The Defense Department published an updated "1260H list" Monday evening stateside — a roster of companies the Pentagon considers affiliated with China's military or defense industrial base. The designations do not impose sanctions explicitly, but mean the Defense Department will be prohibited from contracting directly with listed companies starting later this month, and from procuring their products or services through third parties beginning in 2027. Baidu's American depositary receipts dropped 2.1%, Alibaba slumped 0.8% and BYD slid 0.8%. The additions come after President Donald Trump met Chinese leader Xi Jinping in Beijing last month, where the two leaders agreed to a trade truce and announced a joint investment and trade board. The update underscores a recurring tension in the bilateral relationship and security concerns in Washington over Chinese technology as a strategic threat. The Pentagon briefly posted a similar expanded list in February, then withdrew it without explanation as Trump's China trip had been pending. …