The U.S. administration is considering limits to Chinese video surveillance firm Hikvision's ability to buy U.S. technology, the New York Times reported on Tuesday, in a move that deepens worries about trade frictions between the world's two top economies.
The move would effectively place Hikvision on a U.S. blacklist and U.S. companies may have to obtain government approval to supply components to Hikvision, the paper said.
The U.S. Commerce Department blocked Huawei Technologies from buying U.S. goods last week, effectively banning U.S. companies from doing business with the Chinese firm, a major escalation in the trade war, saying Huawei was involved in activities contrary to national security.
The White House did not immediately respond to a request for comment on the report.
Hikvision shares opened 10% lower but an executive in the company'soffice told Reuters the company had not been informed of the possible U.S. blacklisting.
"The chips Hikvision uses are very commercial and most of the suppliers are actually in China although there are some in the United States," said the executive, who declined to be named due to the sensitivity of the matter.
"Even if the U.S. stops selling them to us we can remedy this through other suppliers" she said.
Hikvision and Dahua Technology which produce audio-visual equipment that can be used for surveillance were specifically cited in a letter to Trump's top advisers last month, signed by more than 40 lawmakers.
The lawmakers said China's actions in its western region of Xinjiang "may constitute crimes against humanity" and urged tighter U.S. export controls to ensure that U.S. companies are not assisting the Chinese government's crackdown there.
China has faced growing condemnation from Western capitals and rights groups for setting up facilities that U.N. experts describe as mass detention centers holding more than 1 million ethnic Uighurs and other Muslims.
Beijing has said its measures in Xinjiang, which are also reported to include widespread surveillance of the population, are aimed at stemming the threat of Islamist militancy. The facilities or camps that have opened are vocational training centers, the government has said.