The executive order, signed by Trump in November, bans US investment in companies allegedly owned by the Chinese military.
Officials in the administration of outgoing U.S. President Donald Trump are expected to discuss a proposed expansion of an executive order banning U.S. investments in suspected Chinese military companies in a meeting Thursday afternoon, according to two people familiar with the matter.
At the meeting, officials from the Defense, State and Treasury departments will discuss, among other things, proposed changes to the November directive, which has created confusion among investors and companies seeking to comply. five sources told Reuters news agency.
One change likely to be discussed is a draft amendment that would prompt U.S. investors to completely divest their positions in blacklisted companies by November 11, 2021, according to two of the sources.
If approved, the proposed change would significantly expand the scope of the directive, which now only states that U.S. investors must stop buying the securities of blacklisted companies on that date.
It was not clear if any final decisions would be made at the meeting. State and Treasury departments did not immediately respond to requests for comment from Reuters news agency and the Defense Ministry declined to comment.
The executive order, signed by Trump in November, is part of his attempt to solidify his harsh legacy towards China in the final days of his administration.
He also sought to give teeth to a 1999 law that instructed the Defense Ministry to compile a list of Chinese companies that he said were owned or controlled by the Chinese military.
The Ministry of Defense has not yet provided a justification for the designation of the companies.
The Pentagon has so far blacklisted 35 companies, including China’s largest chipmaker SMIC and oil giant CNOOC. Reuters news agency reported that the administration was considering adding tech giants Alibaba and Tencent to the blacklist.
A spokeswoman for the Beijing Foreign Ministry has previously said that China opposes US efforts to shut down its companies, adding that Washington’s measures go against the principles of market competition.
The November directive prompted some index providers like MSCI to announce plans to exclude some of the blacklisted companies from their indexes.
But confusion over the order’s requirements prompted the New York Stock Exchange (NYSE) last Thursday to announce plans to remove three Chinese telecommunications companies that the Pentagon has added to the blacklist.
On Monday, the NYSE abandoned the move. Then, in a surprise twist, the stock market reversed course a second time Wednesday and vowed to continue its attempt to delist the companies.
The confusion comes against a backdrop of tension among US agencies over how to aggressively implement the order.
Reuters and other news outlets reported that the State and Defense Departments pushed back on the Treasury Department after it planned to issue a draft guideline that was seen as watering down the order.
US Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin then wrote in tweets that there was no disagreement over the executive order.