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Alibaba has not escaped Washington’s blacklist, but it just got a chance to fight back
A federal judge ordered the Pentagon not to treat Alibaba as a Chinese military company under a new lobbying restriction while the court reviews the company’s challenge. The reprieve gives Alibaba room to communicate with US officials again, even as the Chinese tech giant remains on a closely watched Pentagon list tied to national security concerns.
The fight now reaches well beyond one company. The Pentagon’s list has become another pressure point in the US-China tech rivalry, covering companies tied to artificial intelligence, semiconductors, robotics, drones, and electric vehicles.
Judge pauses lobbying restriction
The South China Morning Post, owned by Alibaba, reported the California court order. The judge told the Department of Defence not to enforce the lobbying prohibition while the court considers Alibaba’s constitutional challenge.
The order is not a final ruling on Alibaba’s lawsuit or its inclusion on the Pentagon’s Section 1260H list.
“We are pleased that, for purposes of the lobbyist-contracting ban, Alibaba will not be treated as a Chinese military company and will have proper channels to communicate our views and address concerns,” an Alibaba spokesperson said, according to SCMP.
Fortune, citing Bloomberg, said that US District Judge Eumi K. Lee ordered the Pentagon not to treat Alibaba as a Chinese military company for the lobbying rule until she resolves the company’s motion or 60 days after a hearing on the matter, whichever comes first. The hearing is scheduled for the week of August 31.
Engadget noted that Alibaba sued the US Department of Defense after it was added to the Section 1260H list in June. The company has denied working with the Chinese military and argued that the designation had no basis in fact or law.
How the lobbying rule raised the stakes
The 1260H list is not the same as a full sanctions list. Engadget said it does not automatically bar companies from doing business in America, unlike some sanctions.
The newer lobbying rule changed the practical consequences. Fortune highlighted that the restriction bars the Defense Department from working with any company represented by lobbyists who also represent firms on the Pentagon blacklist.
In practice, the rule forced lobbying firms to choose between Chinese tech clients and access to US defense contractors. Alibaba said the rule cost it more than two dozen registered lobbyists.
Alibaba argued that the restriction deprived it of the ability to speak to the federal government on legislation, regulations, and policies affecting its business. According to Fortune, the Pentagon maintained that the lobbying restriction complies with the US Constitution although officials agreed to a limited pause while the court reviews the matter.
A legal test for the US-China tech fight
Alibaba’s reprieve is temporary, but the case could matter for other Chinese companies on the Pentagon list. Fortune stated that the roster now includes 188 designated Chinese military companies, up from 20 under an earlier statute.
The list also spans industries that Washington and Beijing both see as strategically important. SCMP reported that Baidu, Unitree Robotics, BYD, and Nio were also added in June.
For Alibaba, the immediate fight is about lobbying access. For the tech sector, the larger question is how much pressure the US can place on blacklisted companies before those restrictions run into constitutional limits.
The next step is the hearing scheduled for the week of August 31. Until then, Alibaba has a narrow but important opening to argue that it should not be treated as a Chinese military company.
Read more: The Pentagon earlier added major Chinese tech firms, including Alibaba, Baidu, and Unitree, to its blacklist, setting up the lobbying fight now playing out in court.