New US law effective June 30 bars the Defense Department from contracting with companies represented by lobbyists who also work for Chinese firms blacklisted for allegedly aiding China’s military [1, 2, 3]. This rule targets the Pentagon’s blacklist known as the 1260H list, which now names 188 Chinese companies across sectors such as semiconductors, AI, robotics, and drones—up from 20 companies covered under a prior statute [1, 3].
Several Washington lobbying firms including Brownstein Hyatt Farber Schreck, Mercury Public Affairs, and MO Strategies have severed lobbying ties with the two Chinese tech giants Alibaba and Tencent to comply with the new law [1, 2, 3]. Disclosures published June 29 and over the preceding week show Alibaba lost five lobbying firms while Tencent lost four [1, 2, 3]. Marty Obst of MO Strategies said, "We will be fully compliant with the new Department of War policy" [1].
Alibaba has filed a lawsuit aiming to remove itself from the Pentagon’s 1260H blacklist [1, 3]. Both Alibaba and Tencent deny working with China’s military and have declined to comment on the lobbying departures [1, 3]. The lobbying restrictions apply only to lobbying work, not legal services. For example, Sidley Austin continues to provide legal representation to Alibaba [1, 3].
The Pentagon blacklist aims to block US government contracts with companies believed to support Chinese military modernization, reflecting growing national security concerns. The expanded blacklist and new lobbying restrictions further isolate Chinese tech firms from US defense ties.
The lobbying changes took effect June 30, immediately barring firms from representing both the US Defense Department and blacklisted Chinese companies. Alibaba’s lawsuit filed about June 23 seeks relief from that designation [1, 3].
