US officials are considering prohibiting Americans from investing in Alibaba Group Holding Ltd and Tencent Holdings Ltd, the Wall Street Journal reported on Wednesday, citing people familiar with the matter.
The plan is still under deliberation and may not go through as agencies debate its impact on markets, according to the report.
Alibaba‘s US-listed shares were down 4.2% in afternoon trading.
On Tuesday, U.S. President Donald Trump signed an executive order banning transactions with eight Chinese software applications, including Ant Group’s Alipay mobile payment app, escalating tensions with Beijing two weeks before President-elect Joe Biden takes office.
Alibaba and Tencent did not immediately respond to Reuters requests for comment.