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Judge blocks Pentagon from labeling WuXi AppTec a Chinese military company
The ruling granted a preliminary injunction while WuXi’s lawsuit proceeds, saying the designation contributed to customer and supplier contract cancellations and relationship changes.
A US federal judge temporarily blocked the Pentagon from designating WuXi AppTec as a Chinese military company, finding defence officials repeatedly misread the evidence used to justify the move. HousingWire reports the decision came from US District Chief Judge James Boasberg, who granted WuXi a preliminary injunction barring the Department of Defence from enforcing or otherwise giving effect to the designation while the lawsuit continues.
In a 35-page opinion, Boasberg wrote that the designation acted as a “scarlet letter,” pointing to impacts on business relationships. The judge noted that customers and suppliers had cancelled contracts, ended long-standing relationships, or shifted business to WuXi’s competitors after the designation.
WuXi AppTec and the US Department of Defence did not immediately respond to requests for comment, according to SCMP Economy. The ruling is described as an early legal victory for WuXi, one of China’s largest pharmaceutical research and manufacturing service providers, and a setback for Washington’s expanding use of national-security restrictions on major Chinese companies.
The judge’s order, however, is not permanent. SCMP Economy reports the decision does not remove WuXi from the Pentagon’s Section 1260H list and does not prevent the department from designating the company again if it uses evidence and reasoning that satisfy the law.