The Trump administration has drawn up a list of companies from China that have ties to its military which may lay the groundwork for fresh U.S. sanctions.
They include tech giant Huawei, the video surveillance company Hikvision, as well as China Mobile and China Telecom, both of which are publicly listed in New York.
The document was seen by Reuters on Wednesday (June 24) and a U.S. defense official speaking on condition of anoynmity confirmed its authenticity and said the document had been sent to Congress.
Huawei was placed on a trade blacklist last year over national security concerns and Washington has led an international campaign to convinces allies to exclude Huawei when setting up their 5G networks.
The Pentagon putting these companies on the list doesn't trigger penalties per se, but its part of a 1999 law that says the president may impose sanctions, which could include blocking all the companies' property.
It will also likely add to tensions between the world's two largest economies, which have been butting heads over a litany of grievances recently, including the global health crisis and Beijing's move to impose security laws on Hong Kong.
Most of the companies on the list and the Chinese Embassy in Washington did not respond to requests for comment.
However, Hikvision called the allegations quote 'baseless' saying it was not a 'Chinese military company' and that it had never participated in any R&D work for military appplications.