The US hit China with sanctions for buying Russian jets and missiles, and Beijing and Moscow are hitting back

The US has hit China with sanctions for Beijing's dealings with Russian weapons makers.
The move is related to Beijing's purchase of advanced aircraft and anti-aircraft systems.
It's the first time the US has imposed sanctions under a law meant to punish Russia for its actions abroad, including interference in the US 2016 election.

The Trump administration has hit China with tariffs on $250 billion in consumer and industrial goods so far this year, and now sanctions tied to Beijing's arms deals with Russia are being added to the mix.

On Thursday, the State Department said it would impose sanctions on China's Equipment Development Department and its director, Li Shangfu, for "significant transactions" with Russia's main weapons exporter, Rosoboronexport.

The Equipment Development Department oversees procurement of China's defense technology.

The Chinese entities will be added a sanctions list established under the Countering America's Adversaries Through Sanctions Act, or CAATSA, which was passed in August 2017 and went into effect in January.

President Donald Trump and Russian President Vladimir Putin at a news conference after meeting in Helsinki, Finland, July 16, 2018. BusinessInsider

This is the first time the US has sanctioned a buyer of Russian weapons under the law. While the sanctions were imposed on China, the State Department official said the move was directed at Moscow.

"The ultimate target of these sanctions is Russia. CAATSA sanctions in this context are not intended to undermine the defense capabilities of any particular country," the official said. "They are instead aimed at imposing costs upon Russia in response to its malign activities."

Strongly outraged

China and Russia have both lashed out at the sanctions.

Russian S-400 Triumph surface-to-air missile systems in the Victory Day parade at Red Square in Moscow, May 9, 2015. BusinessInsider

Russia dismissed the measures as an "unfair" measure meant to undermine Russia's position as a major arms exporter. (The US and Russia are the world's two biggest weapons suppliers.)

Those subject to the sanctions are blocked from foreign-exchange transactions subject to US jurisdictions. Russian Foreign Minister Sergey Lavrov said Friday that Moscow was doing what it could to not depend on the international financial system over which the US has influence.

Russian President Vladimir Putin and Chinese President Xi Jinping at the Victory Parade marking the 70th anniversary of the surrender of Nazi Germany in World War II, in Moscow's Red Square, May 9, 2015. BusinessInsider

The sanctions will ban the Chinese company from export licenses and from foreign-exchange transactions that take place under US jurisdiction and block the firm from the US financial system and its property and interests in the US.

Li, the director, will be barred from the US financial system and financial transactions, have any property and interests blocked, and be barred from having a US visa.

"Today's actions further demonstrate the Department of State's continuing commitment to fully implement CAATSA section 231, which has already deterred billions of dollars-worth of potential arms exports from Russia," the agency said.

The US hit China with sanctions for buying Russian jets and missiles, and Beijing and Moscow are hitting back

Strongly outraged

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