Blacklisted by the US, China Finally Fights Back in Force
Alibaba has sued the US government after being placed on a list of companies accused of assisting China’s military. Its legal challenge has begun to yield results, after a US federal judge granted the Chinese technology company’s request for temporary legal protection.
The judge ordered the US government not to deny Pentagon contracts to a company solely because that company, its parent or its subsidiary does business with an entity that conducts lobbying for Alibaba.
The ruling allows Alibaba to retain lobbyists in Washington who also represent Pentagon contractors. This removes one obstacle to Alibaba’s challenge to its designation as a Chinese military company.
In June, the Pentagon placed Alibaba on a list of companies suspected of helping China’s military. The list also includes internet search provider Baidu, electric vehicle maker BYD, and several other major Chinese technology and manufacturing companies.
Alibaba sued the US government that same month to contest the designation. The company denied having ties to the military and said its products and services were intended for retail, logistics and enterprise technology, not defence or intelligence.
“The designation has no basis in fact or law,” Alibaba said in its lawsuit filed in June, Reuters reported on Wednesday (28 October 2026).
The latest court ruling does not remove Alibaba from the Pentagon’s list. The company is continuing its lawsuit seeking to overturn the designation.
Before the ruling, Alibaba had already dismissed dozens of lobbyists in Washington after the Pentagon added it to the blacklist in June, according to a source familiar with the matter who spoke to Reuters.
The Pentagon designation does not directly impose formal sanctions on listed companies. However, the policy restricts Pentagon contracts with the companies concerned. From 2027, the US government will also restrict purchases of their products or services through third parties.
The source added that other Chinese technology companies were also concerned about the impact of the designation on international lobbying activity and indirect procurement bans. The policy could exclude Chinese products from the supply chains of US defence contractors.
Alibaba is not the only Chinese company to take legal action against its inclusion on the Pentagon’s list.
Last month, two subsidiaries of BYD, the world’s largest electric vehicle maker, sued the US Department of Defence. Their lawsuit challenges a federal law barring Pentagon contractors from using lobbyists who also work for companies on the blacklist.
The two BYD subsidiaries argued that the rule violates their rights under the First Amendment to the US Constitution.