A US federal judge has blocked the Pentagon from enforcing its designation of WuXi AppTec as a Chinese company linked to Beijing’s military.
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US District Judge James Boasberg issued the order on Friday. He acted after WuXi challenged the Pentagon’s decision in court.
Court challenges Pentagon decision
Boasberg said the government had not provided enough evidence to justify the designation.
The judge also highlighted the business impact of the decision. According to his ruling, customers and suppliers canceled contracts after the Pentagon added WuXi to the list.
Several companies also moved their business to competitors, the judge said.
WuXi welcomed the ruling. The company said the decision protects it from the immediate effects of the designation while the legal case continues.
WuXi denies military links
WuXi told the court that it employs about 450 people in the United States. The company also serves more than 1,000 US customers.
The biotech firm said US customers generated about 70% of its revenue last year. It added that most of its board members and senior executives are US citizens.
WuXi described the Pentagon’s decision as arbitrary and unsupported by evidence. The company also alleged that political pressure influenced the designation.
Pentagon expands blacklist
The Pentagon expanded its list to 188 companies in June. Washington has raised concerns that China’s military could use private-sector technology and expertise.
US law will restrict Pentagon contracts with companies on the list later this month. Further restrictions will also apply to purchases through third parties from 2027.
However, appearing on the list does not amount to formal US sanctions. Companies can also petition for removal.
Alibaba, Baidu, BYD and NIO are among the other businesses included on the expanded list.
WuXi’s US business
Founded in 2000, WuXi provides research, development and manufacturing services to pharmaceutical and life-sciences companies.
The company says it serves more than 4,000 customers worldwide. Its US customer base exceeds 1,200, while its market value stands at about $43 billion, according to Reuters data.
The ruling gives WuXi temporary relief as its legal challenge proceeds. It also highlights growing tensions between Washington and Beijing over technology, business and national security.
