he Trump administration is considering adding Alibaba Group and Tencent to a blacklist of Chinese companies that are allegedly owned or controlled by the Chinese military, two people familiar with the matter told Reuters.
The news was first reported by the Wall Street Journal, that said the plan was still under deliberation and may not go through as agencies debate its impact on markets.
Alibaba and Tencent shares were both down roughly three percent in morning trade on the Hong Kong Stock Exchange. Alibaba's US-listed shares closed down just over five percent on the news on Wednesday but were roughly flat in after-hours trading.
Alibaba and Tencent did not immediately respond to Reuters requests for comment.
On Tuesday, US President Donald Trump signed an executive order banning transactions with eight Chinese software applications, including Ant Group's Alipay mobile payment app, escalating tensions with Beijing two weeks before President-elect Joe Biden takes office.
The order, first reported by Reuters, tasks the Commerce Department with defining which transactions will be banned under the directive and targets Tencent's QQ Wallet and WeChat Pay as well.
The move is aimed at curbing the threat to Americans posed by Chinese software applications, that have large user bases and access to sensitive data, a senior official told Reuters.
The order signed by Trump also names CamScanner, SHAREit, Tencent QQ, VMate, and WPS Office and says "the United States must take aggressive action against those who develop or control Chinese connected software applications to protect our national security."
A US official told Reuters that even though the order gave the Commerce Department 45 days to act the department plans to act before January 20 when Trump leaves office to identify prohibited transactions.
Trump's order says, "by accessing personal electronic devices such as smartphones, tablets, and computers, Chinese connected software applications can access and capture vast swaths of information from users, including sensitive personally identifiable information and private information."
It added the data collection "would permit China to track the locations of federal employees and contractors and build dossiers of p