In accordance with an replace to the US Federal Register set to be printed Wednesday, the blacklisted corporations included video surveillance firm Hikvision, in addition to synthetic intelligence firms Megvii Expertise and SenseTime.
Megvii filed for an IPO this summer of at least US$500 million in Hong Kong, while SenseTime raised U.S. $620 million in a second round of funding in just two months a year ago and is one of the world's most valuable unicorns in artificial intelligence.
Why? The US says they have been involved in human rights violations against Uighurs and other predominantly Muslim ethnic minorities.
China's Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer are expected to meet on Thursday for the latest high-level talks aimed at resolving the dispute.
President-elect Donald Trump (L) stands with investor Wilbur Ross after meeting at the Trump National Golf Club Bedminster clubhouse in Bedminster, N.J., on November 20, 2016.
The blacklisting of these firms has been long in the making and national security advisers for months have been pushing for the president to move forward on the plan.
The Department's decision to put the firms to its "entity list" alongside telecommunications giant Huawei TechnologiesCo., which was added in May, means suppliers will be barred from providing technology that originates in the United States to the Chinese firms without a license.
It's worth noting that the Commerce Department had previously added Huawei and more than 100 affiliates to the Entity List. Telecommunications giant Huawei Technologies has been on the list since May.
Hikvision, with a market value of about $42 billion, calls itself the world's largest video surveillance gear maker.
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The United States is banning trade with 28 Chinese government and commercial organizations for their involvement in human rights violations against Uygur minorities.
Senator Marco Rubio, a Republican, praised the Commerce announcement.
A Hikvision spokesman said the company "strongly opposes" the decision and that it "respects human rights and takes our responsibility to protect people in the USA and the world seriously".
SenseTime said in a statement it was deeply disappointed by the USA move, that it abides by all relevant laws of the jurisdictions in which its operates and that it has been actively developing an AI code of ethics to ensure its technologies are used responsibly.
The action follows the USA leading more than 30 countries condemning what it called China's "horrific campaign of repression" against the Muslims at an event on the sidelines of the annual UN General Assembly early last month.
Uyghur man Kasim shares of photo surveillance monitoring in Xinjiang.
Both government and private companies are on the list, among which is also Hikvision, one of the most popular surveillance equipment manufacturers in the world. Shares in US seller Ambarella fell 12% in after-hours buying and selling on the news.
Chinese artificial intelligence pioneer iFytek Co said on Tuesday that the ban will not have a significant impact on its daily operations as most of its core technologies are self-developed.
The action bars the corporations from attempting to procure parts from US corporations without USA authorities approval - a potentially crippling pass.
Vendors are barred from selling USA technology to the Chinese companies without government permission.