US Delays Blacklisting DeepSeek and CXMT, Highlighting a Sense of Powerlessness Under the CCP's Unrestricted Warfare
Reuters reported on June 17 that the U.S. government has temporarily suspended the inclusion of Chinese AI company DeepSeek, storage chip firm CXMT, and over a hundred other Chinese companies identified as posing national security risks into the Commerce Department's Entity List. According to two sources cited by Reuters, these companies had already received approval from an interagency committee last year to be added to the list, but the Commerce Department has yet to officially announce it.
The Entity List is the most direct weapon in the U.S. export control system. Once a company is placed on the list, U.S. companies typically need to apply for licenses to export goods, software, and technology to it, and these licenses are often denied. For Chinese semiconductor, AI, drone, and robotics companies, this is not an ordinary commercial restriction, but a tool to cut off access to U.S. technology, chips, software, equipment, and supply chains.
The scale of the temporarily suspended list is not small. Reuters revealed that at least 75 Chinese entities are involved in advanced semiconductor production, semiconductor equipment manufacturing, and AI model development. Several other companies are accused of supplying China's drone supply chain to Russia, selling restricted Nvidia chips to Chinese universities, and producing drones and robotic dogs for the Chinese military. The list's non-publication does not mean the risks have disappeared; it only means the U.S. export control system has not yet turned these risks into enforceable prohibitions.
DeepSeek is the most prominent name in this report. In early 2025, it challenged the global tech market with its low-cost AI models, once packaged by the Chinese internet as a model of "China's AI overtaking on curves." The U.S. narrative is entirely different. Reuters previously reported that U.S. State Department officials had accused DeepSeek of supporting Chinese military and intelligence operations and attempting to acquire restricted U.S. chips through shell companies in Southeast Asia. OpenAI and Anthropic have also accused DeepSeek or related Chinese AI labs of attempting to extract capabilities from U.S. AI platforms to improve their own models. The fact that DeepSeek was not immediately blacklisted despite these accusations indicates that Washington's security assessments and trade negotiations are in conflict.
CXMT's significance lies in chips. The U.S. Department of Defense had previously listed CXMT on its "Chinese Military Companies" list, believing it to be linked to China's military-industrial complex. China's storage chips, advanced manufacturing processes, AI computing power, and military drone systems are not isolated industrial lines. The CCP has long promoted military-civil fusion, integrating universities, private enterprises, state-owned enterprises, laboratories, military needs, and national subsidies into a single technological mobilization system. When it comes to U.S. export controls, the issue becomes a stark reality: what you sell as chips, equipment, or software may end up in the CCP's military-industrial, surveillance, intelligence, and battlefield supply chains.
The reason for the U.S. pressing the pause button this time is not mysterious. Reuters stated that the Trump administration sought to avoid escalating U.S.-China relations. Since October 2025, the U.S. Commerce Department's Entity List has not added any new companies, marking the longest gap in over a decade. Some in the U.S. strategic community criticize this stagnation for allowing U.S. technology to continue flowing to potential adversaries. The wording is already quite polite. For a regime like the CCP, technological flow is never just a commercial act. Beijing verbally opposes the "over-generalization of national security" while using state power to annex market boundaries, turning companies into components of national capability, and then directing that national capability towards the military, police, intelligence, censorship, and overseas expansion.
The CCP's Ministry of Foreign Affairs, as usual, counterattacked, accusing the U.S. of abusing export controls and suppressing Chinese companies. There is nothing new in this rhetoric. Chinese companies require free trade overseas but are subject to the full constraints of party organizations, state-owned capital, military-civil fusion, data security, the National Intelligence Law, and political tasks domestically. Beijing demands that others treat Chinese companies according to market rules but does not allow Chinese companies to truly break free from party control according to market rules. The CCP is most adept at hiding its state apparatus within commercial shells and then demanding that the free world pretend not to see it.
This choice by the U.S. is also largely due to its own powerlessness in the face of China's asymmetric warfare. The U.S. knows which companies pose risks and has mechanisms to place them on the Entity List, but as long as the White House prioritizes trade negotiations, tariff leverage, rare earth pressure, and diplomatic meetings, national security tools may be shelved. The CCP survives precisely by exploiting these gaps. It uses rare earths, markets, and supply chains as hostages while continuing to absorb Western technology to fuel its AI, chip, drone, and military-industrial systems.
Once Chinese tech companies are tied to the CCP's national strategy, it is naive for the outside world to treat them as ordinary companies. DeepSeek, CXMT, and the companies on this unannounced list truly expose the CCP regime's technological absorption capability: sucking in the innovative achievements of open societies, transforming them through the party-state system into military power, police power, censorship power, and coercive power abroad. The U.S.'s temporary pause in blacklisting does not leave Beijing with space for goodwill, but rather with time to continue exploiting loopholes.