China will impose sanctions on U.S. Lockheed Martin, Boeing Defense, Raytheon, and some other companies involved in Washington’s arms sales to Taiwan, according to Reuters. The U.S. has approved the potential sale of three weapon systems to Taiwan, including sensors, missiles, and artillery, valued at about $1.8 billion. China said it is protecting national interests but did not spell the kind of sanctions it would impose.

  • Beijing considers Taiwan a wayward province and has vowed to bring it under control, including by force. 
  • Trump has supported Taiwan through arms sales and visits by senior U.S. officials, which has increased tensions with Beijing.  
  • The U.S. has no official diplomatic ties with Taiwan but is legally bound to provide the Island with a means to defend itself.
  • In the past, China has imposed sanctions on Lockheed Martin and other U.S. entities for selling weapons to Taiwan, but it is unclear the form of penalties imposed.

Lockheed Martin, Boeing Defense, and Raytheon stocks are declining. RTX: NYSE is down 3.60%, BA: NYSE is down 3.30%, LMT: NYSE is down 2.67%