Alibaba Sues Pentagon Over Chinese Military Blacklist Designation

Alibaba has filed a federal lawsuit against the US Department of Defense, challenging its inclusion on a Pentagon list of companies allegedly tied to the Chinese military. The suit, lodged Tuesday in San Jose federal court, calls the designation "arbitrary and capricious" and says it has no factual or legal basis. The Pentagon added Alibaba this month to an updated roster of 80 firms, alongside Baidu and BYD, citing links to China's military-civil fusion efforts.

The listing bars new Pentagon contracts with named companies starting June 30 and limits their ability to hire US lobbyists. China responded Monday with export controls on 10 American defense and rare-earth firms, straining ties just weeks after a Trump-Xi meeting in Beijing.

Company Disputes Military Ties in Court Filing

Alibaba's legal challenge centers on its rejection of any connection to China's armed forces or state military strategy.

A company spokesperson told AFP on Wednesday that Alibaba is not a Chinese military company nor part of any military-civil fusion strategy, and confirmed the firm is suing the agency, now referred to internally as the Department of War, to seek removal from the list.

The complaint reinforces this position directly, stating that the determinations have no basis in fact or law.

Ownership Structure Cited as Evidence

In its filing, Alibaba emphasized its corporate makeup to counter the Pentagon's claims.

The company described itself as a publicly traded e-commerce and cloud-services provider whose shareholder base is dominated by major American financial institutions, including JPMorgan, Citigroup, and BlackRock.

Pentagon's Expanded Blacklist Targets Major Tech Firms

The dispute stems from a Defense Department list released earlier this month identifying 80 companies and subsidiaries it says assist Chinese military objectives.

Beyond Alibaba, the roster includes search engine operator Baidu and electric vehicle maker BYD, broadening the scope of firms facing US contracting restrictions.

Contract and Lobbying Restrictions Take Effect June 30

Once the designation takes hold, the Pentagon will be barred from entering new contracts with listed companies or their controlled subsidiaries.

The restrictions extend further, limiting designated firms' capacity to retain lobbying representation in the United States. Alibaba's lawsuit argues this provision violates First Amendment rights, noting that advocates who have represented Alibaba for years have informed the company that they can no longer do so.

Beijing Responds With Export Controls on US Firms

China moved quickly after the blacklist's release, announcing retaliatory measures on Monday.

The Chinese government imposed export controls on 10 US companies operating in the defense and rare earths mining sectors, signaling a tit-for-tat response to Washington's action.

Trade Friction Follows Recent Diplomatic Talks

The escalating corporate dispute arrives shortly after a high-level diplomatic effort to ease tensions between the two governments.

President Donald Trump and Chinese President Xi Jinping met in Beijing last month in an attempt to stabilize bilateral relations, a goal now being tested by the blacklist fallout and subsequent retaliatory trade measures.

[Source: arynews]