The Trump administration on Friday added some of China's biggest companies, including Alibaba and Baidu, to a list of firms allegedly aiding China's military - however, strangely the listing was pulled within mere minutes with no explanation initially issued. A Bloomberg newswire Friday morning indicated:
US PULLS DOCUMENT THAT LISTED FIRMS LINKED TO CHINA MILITARY
This was quickly followed by a correction: US removes document that listed firms linked to China's military and then the clarification that US Agency requested withdrawal of document, per the Federal Register. All of this was enough to cause Alibaba Group Holding Limited (BABA) stock to fall 5% and Baidu (NASDAQ:BIDU) to drop 2% Friday immediately on the reports, followed by a swift rebound on word of the sudden delisting.
The initial, and now withdrawn listing comes amid allegations from US officials that Alibaba is Chinese military-linked company, part of the Trump strategy of ratcheting up pressure on Beijing ahead of an expected meeting between President Trump and Chinese President Xi Jinping.
The much anticipated summit is currently set for the first week of April, ahead of which Washington has taken a series of measures, seen as typical Washington leverage-building with Beijing. But as Reuters has observed, the White House seems to be treading very carefully, not wanting to go too far in provoking the ire of Beijing, which could derail the key visit before it even kicks off:
The Trump administration has shelved a number of key tech security measures aimed at Beijing ahead of an April meeting between the two countries' presidents. The measures include a ban on China Telecom's U.S. operations and restrictions on sales of Chinese equipment for U.S. data centers, sources said.
The U.S. has also put on hold proposed bans on domestic sales of routers made by TP-Link and the U.S. internet business of China Unicom and China Mobile along with another measure that would bar sales of Chinese electric trucks and buses in the U.S., four people said, declining to be named.
Did some mid-level Pentagon officer not get the memo?
Perhaps the 'mistake' was realized post-haste in view of the highly anticipated Trump-Xi summit, and that Alibaba 'military-linked' sanctions would only poison the water. Or... a risky Trump 'tactic' in the lead-in to April?
No immediately clarifying information on just what is going on has been forthcoming.
This of course isn't the first time the Pentagon has played its hand regarding its well-known view of Alibaba's alleged Chinese PLA ties, but this brief Friday morning episode certainly escalates things from Beijing's point of view, even if it was quickly 'taken back'. But the proverbial cat is out of the bag.