The blacklisting threatens to escalate tensions between the world’s two largest economies. While the Pentagon’s blacklist carries no specific sanctions, it discourages US firms from dealing with its members. CATL supplies not just Tesla but also many of the world’s biggest automakers, from Stellantis NV to Volkswagen AG. Its inclusion may disrupt that ecosystem just as Washington and Brussels are sounding the alarm about China’s growing dominance in a key industrial sector.
The US has blacklisted Tencent Holdings Ltd. and Contemporary Amperex Technology Co. Ltd. for alleged links to the Chinese military, targeting the world’s biggest gaming publisher and top electric-vehicle battery maker in a surprise move weeks before Donald Trump takes office.
CATL, a major supplier to Tesla Inc., joined Tencent on a Federal Register of entities deemed to have ties with the People’s Liberation Army. Both companies protested their inclusion as a mistake, saying they have no ties with the military. Tencent’s stock slid more than 7% in Hong Kong, notching its biggest intraday drop since October. CATL’s shares fell more than 5%, also their biggest fall in about three months.
