WASHINGTON (Reuters) – The Trump administration has canceled plans to blacklist Chinese tech giants Alibaba, Tencent and Baidu, according to four people familiar with the matter, who provided a brief recovery to the major Beijing companies amid wider repression in Washington.
Washington, however, plans to move forward this week with a desire to add up to nine more Chinese companies to the list, one of the people said.
The decision to abandon plans to add Chinese tech giants is a blow to the administration’s Chinese hawks, who have tried to cement President Donald Trump’s tough legacy in China before his presidency ends on January 20th.
Retailer Alibaba, search engine giant Baidu and video game leader Tencent, which owns the WeChat messaging app, were shortlisted to be added to a catalog of alleged Chinese military companies, which would have subjected them to a new ban on investment in the US.
But Treasury Secretary Steven Mnuchin, widely regarded as a sweeter stance on China, backed down, freezing plans, people said. Businesses, as well as the Treasury, State and Defense departments did not respond immediately to requests for comment.
The abrupt decision puts great relief on the Trump administration’s deep divisions over Chinese politics, even as Trump tries to lock President-elect Joe Biden into aggressive stances against the world’s second-largest economy.
Last month, the White House blacklisted China’s leading chip maker SMIC and oil giant CNOOC. Trump also unveiled an executive order in January banning U.S. transactions with eight Chinese apps, including Ant Group’s Alipay. Both measures were first reported by Reuters.
While Trump was promoting a trade deal signed between rival nations, relations between Washington and Beijing were exacerbated last year by China’s handling of the deadly coronavirus and its crackdown on freedoms in Hong Kong.
Report by Alexandra Alper and Humeyra Pamuk; Written by Alexandra Alper; Additional reports by Andrea Shalal and Mike Stone; Editing by Leslie Adler and Howard Goller