Alibaba Wins Temporary Reprieve From US Chinese Military Blacklist

Tue, 07 Jul 2026 00:00:00 +0000

A federal judge has granted Chinese e-commerce giant Alibaba a temporary reprieve from key restrictions tied to the Pentagon’s Chinese military company blacklist, marking a significant legal setback for US defense policy toward Beijing-linked firms.

US District Judge Eumi K. Lee issued an order on Sunday directing the Pentagon to refrain from treating Alibaba as a “Chinese military company” under newly enacted lobbying restrictions, according to Bloomberg’s report. The ruling will remain in effect until the judge resolves the company’s motion, or 60 days after a scheduled court hearing, whichever comes first.

The 1260H List and Its Consequences

Alibaba was added to the Pentagon’s Section 1260H entity list, which designates companies believed to have ties to the People’s Liberation Army. Unlike the Treasury Department’s OFAC sanctions list — which entirely bars companies like DJI from doing business in the United States — the 1260H list historically carried lighter penalties. However, a recent legislative change dramatically increased its bite: the Department of Defense is now prohibited from entering into contracts with any company that employs lobbyists or lobbying firms that also represent 1260H-listed entities.

This new restriction, Alibaba argued in its lawsuit, effectively silenced the company in Washington. All of Alibaba’s more than two dozen registered lobbyists withdrew their registrations after the company was added to the list, leaving the e-commerce giant unable to advocate on legislation, regulation, and policies shaping its business.

Alibaba’s Constitutional Challenge

In its legal complaint, Alibaba asserted that its placement on the 1260H list had “no basis in fact or law” and that the company does not work with or for the Chinese military. The company further argued that the lobbying prohibition violated its First Amendment right to free speech and its Fifth Amendment right to due process.

“Alibaba has lost its voice across the whole of its dealings with the federal government — on legislation, on regulation, on the policies that shape its business,” the company stated in court filings.

Government Response and Political Pressure

The Pentagon, while defending the constitutionality of the lobbying restriction, acknowledged that “it will benefit both the parties and the court to enter into a stipulation for a limited period of time so the court can assess” Alibaba’s complaint, paving the way for the temporary reprieve.

However, political pressure is mounting from Capitol Hill. US House China select committee chair John Moolenaar and member Elise Stefanik recently urged Defense Secretary Pete Hegseth to enforce “strict implementation” of the lobbyist ban. In a letter, they wrote that “it is critical that the Department’s contractors avoid partnering with firms and lobbyists that simultaneously advance the interests of companies executing the military ambitions of the Chinese Communist Party.”

What Comes Next

Judge Lee’s decision could have broader implications for other companies currently on or facing inclusion in the 1260H list. If Alibaba succeeds in its constitutional challenge, it may force the Pentagon to reconsider both its designation process and the scope of the lobbying restrictions tied to it.

For now, Alibaba has secured breathing room to continue operating in the US without the lobbying stranglehold that the blacklist imposed. The case represents one of the most significant legal tests yet of the Biden and Trump administrations’ expanding use of entity lists to target Chinese technology companies, and the outcome could shape US-China tech policy for years to come.

Alibaba on Know the Tech

Alibaba Wins Temporary Reprieve From US Chinese Military Blacklist

The 1260H List and Its Consequences

Alibaba’s Constitutional Challenge

Government Response and Political Pressure

What Comes Next