The Trump administration is considering adding tech giants Alibaba and Tencent to a blacklist of firms allegedly owned or controlled by the Chinese military, two people familiar with the matter said on Wednesday.
Targeting Asia’s two most valuable companies would be U.S. President Donald Trump’s most dramatic step yet in a recent raft of measures unleashed against Chinese companies as he seeks to cement his hardline policy against Beijing during his final days in office.
Defense Department officials, who oversee the blacklist designations, have not yet finalized plans and are also discussing adding other Chinese firms to the list, the sources said, speaking on condition of anonymity because the deliberations are private.
Shares in Alibaba, China’s biggest e-commerce firm, finished down 3.9% on the Hong Kong Stock Exchange while Tencent, a gaming and social media behemoth, lost 4.7%. Alibaba’s U.S.-listed shares closed down just over 5% on the news on Wednesday.
Some investors expressed skepticism, however, that Alibaba and Tencent would face long-term restrictions - given that they are worth a combined $1.3 trillion, widely held by U.S. investors and the likely reputational and financial hit to U.S. stock markets.
Trump escalated measures against Chinese firms in November with an executive order that bans U.S. investors from buying shares of Chinese firms.
On Tuesday, he ordered a ban on transactions with eight Chinese software applications, including Ant Group’s Alipay mobile payment app and Tencent’s QQ Wallet and WeChat Pay.
