So sanction applies to any company trading with them. If US company B trade with banned A, company B lose Chinese asset, even if company B was not on sanction list.
Just to some reasonable selective extent, like if a sanctioned company employee bought a soft drink from Walmart it doesn't mean Walmart would be nuked with sanctions. But if it's weak companies and especially ones selling/buying key equipment to them.
The goal isn't to dick measure but to inflict real degradement on US military manufecturing capability.
Without civilian purchase deals and/or subcontractors to manufacture, these companies will be doomed, they can either shut the doors or become "national security" companies i.e. zombify
Bans issued from China are worded as a moratium on worldwide activity, even in the US, although US itself will violate it for obvious reasons.
Taiwan related sanctions have worked against small and medium arms manufacturing companies, to the point where US really struggles to make small ticket items (lancet style missiles, FPV, guidance kits etc.). Against giants like Boeing, Taiwan sanctions have not been as effective, but they've also slowly helped hollow out their innovation and money efficiency. The final verdict isn't in yet, but so far, the careful application of sanctions seems to work.
