China said it would sanction U.S. firms that participate in arms sales to Taiwan, a retaliatory move that is expected to have minimal effect on defense companies but is likely to further complicate efforts to resolve the simmering trade dispute between Beijing and Washington.

The U.S. announced plans for sales of $2.2 billion in tanks, missiles and related military hardware to Taiwan in June, drawing the ire of Beijing, which sees such sales as interference in its sovereignty claims over the self-ruled island.

China’s...