The U.S. Department of Defense briefly added Alibaba, BYD, and Baidu to its list of companies with alleged Chinese military ties. The Pentagon published the designation in the Federal Register before withdrawing it without an official explanation.
U.S.-listed shares of Alibaba and Baidu dropped as much as 5% in extended trading following the announcement. Prices recovered a portion of those losses after officials retracted the document.
Inclusion on the Section 1260H list prohibits the Pentagon from awarding future contracts to the named entities. While the designation carries no immediate sanctions, it serves as a formal warning to global investors.
Both Alibaba and Baidu denied the allegations. The companies stated there is no factual basis for their inclusion on the list.