The United States government has quietly approved adding DeepSeek and more than 100 Chinese technology companies to its trade blacklist, but has chosen not to publish those designations, according to a Reuters exclusive citing multiple people familiar with the matter. The decision reflects a deepening tension at the heart of American technology policy: whether national security enforcement or trade diplomacy should take precedence when the two come into direct conflict.
The Entity List, maintained by the Commerce Department’s Bureau of Industry and Security, is the United States’ primary tool for restricting the export of American technology to foreign companies deemed a threat to national security. Once placed on the list, a company cannot receive US-origin goods, software, or technology without a license, which are almost never granted. The list has not been updated since October 2025, marking the longest gap in more than a decade, according to Philip Luck, a senior fellow at the Center for Strategic and International Studies.
A Backlog of Approved Designations
The interagency committee that reviews Entity List nominations, which includes representatives from the Commerce, Defense, Energy, and State departments, has already cleared the additions. At least 75 Chinese entities involved in advanced semiconductor production, semiconductor manufacturing equipment, and AI model development were approved for designation after completing the full review process. Yet none have been published.
The companies held back include DeepSeek, the Hangzhou-based AI lab whose January 2025 model release sent shockwaves through global markets, and ChangXin Memory Technologies (CXMT), which the Defense Department had previously designated as a Chinese military company under the Biden administration. Also among the backlog are Chinese drone and robot dog manufacturers with documented ties to the People’s Liberation Army, as well as dozens of companies identified for supplying restricted Nvidia chips to Chinese universities and for selling components used in Russian drones recovered in Poland last September.
The decision to withhold publication has been driven largely by Jeffrey Kessler, the under secretary of commerce for industry and security, who has reportedly sought to avoid adding Chinese parties to the list since late 2025 out of concern that doing so would escalate US-China tensions at a diplomatically sensitive moment. The approach reflects a broader posture within the current administration of subordinating enforcement actions to trade negotiations.
Security Concerns Documented but Shelved
The case against DeepSeek is not merely theoretical. A senior US State Department official told Reuters last year that the company had supported China’s military and intelligence operations. Separately, Anthropic identified a campaign by DeepSeek and two other Chinese AI laboratories to illicitly extract capabilities from its Claude AI system, while OpenAI warned lawmakers that DeepSeek had been targeting its own models. The company also allegedly attempted to use Southeast Asian shell companies to illegally access advanced US chips in order to circumvent export controls.
Despite this documented record, the administration has opted for restraint. The calculus appears to be that blacklisting high-profile Chinese AI companies, particularly one as globally prominent as DeepSeek, would provoke a retaliatory response from Beijing at a time when the two governments are engaged in ongoing trade negotiations following the May 2026 Geneva summit.
Critics Warn of a Weakened Tool
The decision has drawn sharp criticism from national security experts who argue that the Entity List is losing its deterrent value. “The fact the US hasn’t put any companies on the Entity List since October demonstrates that trade policy is overshadowing the use of a critical national security tool,” said Kevin Kurland, a former Commerce Department official. Philip Luck of CSIS offered a more resigned assessment: “The Entity List is like whack-a-mole and you’ve got to keep whacking the moles.”
China’s foreign ministry, for its part, called on Washington to cease what it described as the “politicizing, instrumentalizing, and weaponizing” of economic, trade, and technological issues, language that suggests Beijing is aware of the internal debate and is actively lobbying against enforcement action.
The standoff illustrates a structural problem that has become increasingly visible in US technology policy: the tools designed to slow China’s AI and semiconductor development were built for a different era of the bilateral relationship, one in which economic decoupling was considered more feasible than it appears today. As Chinese AI companies grow more globally integrated, with DeepSeek’s models now among the most widely used by American developers, as EastFrontier has previously reported, the political cost of blacklisting them rises alongside their commercial footprint.
The Limits of Deterrence
The delay also raises questions about the downstream effects on companies that have already been designated. The Entity List’s power rests partly on the credibility of the threat it represents. If companies and governments around the world observe that the United States approves designations but does not publish them, the list’s deterrent effect is weakened even for those already on it.
For the Chinese companies awaiting formal designation, the current limbo offers a window of continued access to American technology that the interagency process has already determined they should not have. Whether that window closes depends less on the security review process than on the outcome of trade negotiations that have no fixed timeline.