The designation does not impose instant bans but could hurt the firms’ reputation. It serves as a warning to US businesses about the risks of working with them and could push the US Treasury to consider sanctions.

The Defense Department list identifies Chinese firms believed to operate directly or indirectly within the US while allegedly supporting Beijing’s military agenda. Updated annually, the list now includes 134 companies.

CATL plays a role in the battery supply chain for carmakers like Ford and Tesla.

Both Tencent and CATL deny any links to China’s military. Beijing blasted the decision as "unreasonable suppression of Chinese companies.”

Tencent called the designation a "mistake," according to CNN.

"We are not a military company or supplier. Unlike sanctions or export controls, this listing has no impact on our business. We will nonetheless work with the Department of Defense to address any misunderstanding," a company spokesperson said.

Ahead of incoming US President Trump’s return to the White House on Jan. 20, the tech rivalry between Washington and Beijing is heating up.

Recently, Beijing announced plans to limit exports of technology essential for extracting minerals that are vital to the burgeoning global electric vehicle (EV) industry.

In December, the outgoing Biden administration implemented new export controls on US-made semiconductors, citing concerns that they could be repurposed by Beijing to develop next-generation weaponry and artificial intelligence (AI) systems.

The US Commerce Department said the restrictions aim to impede China's progress in advanced AI capabilities that could be utilized in military applications.

Additionally, the measures intend to weaken China's burgeoning semiconductor industry, which the US claims poses a threat to its national security and that of its allies.

AzVision.az

More about: