Alibaba receives a stay on the US lobbying prohibition.

      A federal judge has instructed the Pentagon to provide Alibaba with temporary relief from a law that led to the termination of all its lobbyists in Washington, according to Bloomberg. This relief will be in place while the court assesses the constitutionality of the law.

      The lawsuit arises from Alibaba's inclusion on the Pentagon's 1260H list of Chinese military companies in June, which it is contesting. The case could set a precedent regarding the extent to which the US can limit the activities of Chinese firms within its borders. Last month, Alibaba filed a lawsuit against the Defense Department in San Jose after being added to this list.

      In June, the Pentagon included Alibaba, Baidu, BYD, and the robotics company Unitree, bringing the total number of firms on the list to 188. Alibaba disputes the validity of this designation, claiming it infringes on its due process and First Amendment rights.

      The departure of lobbyists is due to a different clause, Section 851 of the 2025 US defense law, which prevents the Pentagon from contracting with companies that also lobby for those on the 1260H list. Following its implementation last week, five lobbying firms severed ties with Alibaba, and four did the same with Tencent.

      Alibaba contends that the combination of these events silences its voice in Washington at a critical time. The judge's ruling temporarily restores its access to lobbyists.

      The implications extend beyond Alibaba alone. The 1260H designation does not impose immediate sanctions, but it carries significant reputational and commercial implications for investors, clients, and contractors. Reports indicate that Baidu and BYD are also challenging their listings.

      In response, Beijing has initiated trade restrictions on 56 US companies, intensifying tensions in Congress. Meanwhile, Washington has refrained from blacklisting DeepSeek and over 100 other Chinese firms, suggesting that the designation acts as both a negotiation tool and a security measure.

      For Alibaba, the relief is limited and temporary, and the blacklist remains in effect. However, a US court's willingness to evaluate the law's constitutionality may prompt all 188 companies on the list to secure legal representation.

      Published July 5, 2026 - 9:02 pm UTC