We study the ‘China Military Catch-All Rule’, implemented in 2007 by the US Bureau of Industry and Security, which tightened export rules for certain dual-use items to China. When first proposed, the policy covered 77 HS six-digit categories; after an inter-agency review, 18 were removed. We exploit this change to estimate the policy’s causal effects on imports and innovation. Our baseline difference-in-differences strategy compares firms that imported controlled items before 2007 with firms that imported only the excluded items, which serve as our control group. We corroborate our results with propensity-score matching and synthetic difference-in-differences. To trace both trade and innovation responses, we link transaction-level Chinese customs data, firm surveys, value-added tax (VAT) invoice data on interfirm linkages within China, and the universe of Chinese patent applications.