Trump Administration Briefly Adds Alibaba, Baidu And BYD To China Military-Linked Firms List Before Taking It Down

• The 1260H list identifies businesses the U.S. believes are connected to China’s military. 
• Inclusion on the 1260H list does not currently impose direct sanctions.
• The timing of the addition and retraction could strain relations with Beijing, following the trade truce reached last October.

President Donald Trump’s administration reportedly placed several major Chinese technology firms on the Pentagon’s list of companies it alleges have ties to China’s military, only to remove the update minutes later without offering an explanation. 

The abrupt reversal fueled speculation about Washington’s broader strategy toward Beijing.

Companies on The List

A Bloomberg report said e-commerce giant Alibaba Group (BABA), Baidu Inc. (BIDU), and BYD Co. (BYDDF, BYDDY) were added to the list. The companies were included on the Defense Department’s 1260H list, which identifies businesses the U.S. believes are connected to China’s armed forces, the report said. 

The move could complicate Trump’s upcoming April visit to China, particularly discussions with President Xi Jinping about exporting Nvidia Corp. (NVDA) H200 chips. Alibaba may be affected if it seeks access to such technology, the report added. 

Following the initial report of the addition, Alibaba's stock traded over 3% lower on Friday morning, while Baidu’s stock traded over 2% lower. 

What Is The 1260H List?

Initially released in 2021, the 1260H list now features over 130 companies, including airlines, construction firms, shipping corporations, hardware producers, and communications businesses. 

Although inclusion on the 1260H list does not currently impose direct sanctions, new legislation will restrict the Department of Defense from contracting or procuring goods from these companies in the coming years, the report said. 

Tensions between the two powers have been simmering for a long time, but seemed to cool off following the trade truce reached last October between President Donald Trump and President Xi Jinping.

Even with the trade truce, the U.S. and China are working to rely less on each other. Trump has been nudging U.S. firms to increase rare-earth metal production to catch up and reduce the country's reliance on China, which holds more than 50% of global reserves. 

Meanwhile, China is moving forward with its five-year plan to advance semiconductor technology and create supply chains that do not depend on the U.S.

Also See: Why Did INTS Stock Plummet 30% Pre-Market Today?

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