Alibaba’s shares have dropped on both the New York and Hong Kong stock exchanges following a report that the company could be blacklisted by the Trump administration.
The Chinese retail giant’s stock dropped 3.9 per cent in Hong Kong trading yesterday after the Wall Street Journal reported that the US government could ban investments in the company.
The Trump administration is believed to be considering adding Alibaba and tech giant Tencent, China’s two most valuable companies, to its blacklist of Chinese companies it believes has ties to the country’s government and military.
This would be a significant extension to Trump’s executive order which in August banned Chinese social media giants TikTok and WeChat in the US, giving American companies just 45 days to stop all transactions with the pair.
Earlier this Trump also moved to ban transactions with Alibaba’s payment arm Alipay and Tencent’s payment app WeChat pay.
It would mark the latest and most significant escalation in tensions between the two countries as the outgoing Trump administration ramps up efforts to deprive Chinese companies of US capital.
“The U.S. behavior is against international trade rules and principles of fair competition,” Chinese Foreign Ministry spokeswoman Hua Chunying said.
“It undermines normal market order and Chinese companies’ rights and interests. And it will also eventually weaken global investors’ confidence in the U.S. business environment.”
The potential blacklist expansion has already seen Hong Kong’s Hang Seng index dip 0.5 per cent and threatens to wreak havoc on global stock markets.
If the ban is approved, investors would be banned from trading Alibaba stocks from January 11.