DoD Puts Tencent under Fire | What EVERYONE'S Getting Wrong (VL)
In this episode, Richard Hoeg explores the US Department of Defense's CMC designation and its business impacts on Tencent Holdings. He covers legal background, executive orders, and insights from Bloomberg, analyzing market reactions and clarifying misunderstandings. The discussion includes the National Defense Authorization Act, Trump's executive orders, and more. Hoeg provides historical context, examines Tencent's situation, and the Department of Defense's role in US-China relations. He also considers potential actions by the future administrations and their effects on Tencent's global market presence, concluding with national security debates and possible legal proceedings.
Key Points
- Tencent and CATL have been designated by the U.S. Department of Defense as Chinese military companies, complicating their business operations in the U.S. despite no direct sanctions or bans being imposed.
- The designation process stems from the William M. Thornberry National Defense Authorization Act for Fiscal Year 2021, not from former President Trump's 2020 executive order, highlighting the complexity and interlocking nature of U.S. laws regarding international business and defense.
- Tencent plans to seek reconsideration and, if necessary, legal proceedings to challenge their inclusion on the list, potentially arguing that the designation is mistaken and not based on substantial evidence.
LINKS
MILITARY DESIGNATION https://www.theverge.com/2025/1/6/24337489/tencent-catl-us-defense-department-chinese-military-companies https://archive.ph/FPpBi https://public-inspection.federalregister.gov/2025-00070.pdf
TRUMP/1237 https://www.cnbc.com/2020/11/12/trump-bans-investments-in-companies-that-aid-chinas-military.html https://www.federalregister.gov/documents/2020/11/17/2020-25459/addressing-the-threat-from-securities-investments-that-finance-communist-chinese-military-companies https://www.defense.gov/News/Releases/Release/Article/2328894/dod-releases-list-of-additional-companies-in-accordance-with-section-1237-of-fy/
MCFs AND 1260H https://www.lawfaremedia.org/article/chinese-military-civil-fusion-and-section-1260h-congress-incorporates-defense-contributors https://en.wikipedia.org/wiki/Brookings_Institution https://www.cmtradelaw.com/2024/02/dod-is-making-its-list-and-checking-it-twice-dod-updates-1260h-chinese-military-companies-list/
LEGAL ACTION? https://www.bbc.com/news/articles/c9q78wn9g8zo https://www.eurogamer.net/tencent-threatens-legal-proceedings-if-us-doesnt-overturn-decision-to-label-it-as-a-chinese-military-company https://www.rockpapershotgun.com/worlds-biggest-game-publisher-tencent-threaten-to-sue-us-government-for-listing-them-as-a-chinese-military-company https://static.www.tencent.com/uploads/2025/01/07/ed277c23e9fe0fc870fb9f02350e7658.pdf https://www.theverge.com/2024/10/19/24274153/dji-sues-us-dod-chinese-military-company
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Transcript
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