Tencent and CATL will sue the US over inclusion on the Pentagon blacklist

The US Department of Defense this month included several Chinese companies on a so-called “blacklist” of individuals suspected by US officials of supporting the Chinese defense industry. Tencent and CATL were initially not ready to accept the status of new members of this list, so they stated that they would prefer to protect their interests through the courts.

Image source: CATL

First of all, as the Financial Times notes, both Chinese companies intend to achieve their exclusion from this list in pre-trial proceedings, since such a possibility is provided for by the relevant American department. Pony Ma, founder and chairman of the board of directors of the Tencent holding, immediately stated that the company would begin negotiations with the US Department of Defense, and if necessary, it would defend its interests legally. According to him, Tencent is not a Chinese military company, and does not even participate in supporting the Chinese military-industrial complex.

The largest manufacturer of lithium batteries for electric vehicles, the Chinese company CATL, responded to its inclusion in the Pentagon’s list with a statement that it “has never been involved in any activities related to the defense industry,” and the corresponding actions on the part of the United States are a mistake and cannot significantly adversely affect its business. At the same time, CATL is ready to actively discuss the situation with representatives of the American defense department, and, if necessary, act in the judicial field, protecting the interests of both the company and its shareholders.

The confidence of Tencent and CATL at this stage is probably given by precedents with Xiaomi, which in 2021 achieved the removal of its name from the list of unreliable companies according to the Pentagon by appealing to an American court. The latter ruled that there was insufficient evidence to include Xiaomi on the said list. Last year, the Chinese AMEC, which produces equipment for chip production, succeeded in a similar business.

It is noteworthy that during Trump’s first presidential term, US authorities tried to achieve a ban on the operation of Tencent’s WeChat messenger in the country, citing the possibility of the Chinese side using information collected about Americans to the detriment of national security interests. In 2020, a similar decree from Trump was found to be contrary to the country’s constitution, so Tencent managed to avoid blocking WeChat in the United States. Currently, this messenger and its accompanying ecosystem have about 1.4 billion active users in China and beyond.