Tensions Rise: U.S. Lists Chinese Tech Giants As Military Collaborators

The U.S. Defense Department has added Chinese firms Tencent Holdings and CATL to its list of companies linked to China's military, intensifying U.S.-China tensions. This move, made weeks before Donald Trump's inauguration, impacts company reputations and pressures the U.S. Treasury to impose sanctions.

The United States Defense Department has escalated tensions with China by adding major companies Tencent Holdings and CATL to a list that accuses them of having ties with China's military. This development comes as a significant action before President-elect Donald Trump assumes office, sparking concern and denials from the firms involved.

Following the announcement, shares of Tencent and CATL saw notable drops in market value, with both companies decrying the decision as erroneous. Tencent stated intentions to contest its inclusion, maintaining that business operations would remain unaffected, while CATL insisted it has no military connections.

The designation doesn't lead to immediate bans but tarnishes the reputation of the implicated companies and serves as a caution to U.S. entities. Adding to the friction between the two largest global economies, this move aligns with broader efforts by the U.S. to curb perceived security risks from Chinese enterprises.

(With inputs from agencies.)