By Mariam Sunny
(Reuters) -Shares of Calvin Klein-owner PVH Corp and genetic testing company Illumina fell on Tuesday after China placed the two companies on its “unreliable entity” list, putting them at risk of sanctions.
Companies added to the blacklist can be subject to fines and a broad range of other sanctions, including a freeze on trade and a revocation of work permits for foreign staff.
Illumina’s shares slipped 2.5% to $3.35, while PVH’s stock dropped 3.1% to $80.72 in morning trading.
PVH, which has already been under scrutiny from Chinese regulators over “improper” conduct related to the Xinjiang region, said the company would continue engaging with relevant authorities to work towards a resolution.
For Illumina, China accounts for about 7% of sales. Two of its Chinese rivals, MGI and BGI, were listed in a U.S. bill that aims to restrict business with several biotech companies on grounds of national security.
The inclusion in the list “appears more permanent posturing by China vs retaliatory tariffs, which can be removed or dialed back depending on how the negotiation progresses between the U.S. and China”, said Leerink Partners analyst Puneet Souda.
China’s limited response came just after U.S. President Donald Trump’s sweeping tariffs took effect, underscoring attempts by its policymakers to engage Trump in talks to avert an outright trade war.
China also said it was investigating Alphabet, although it did not provide details on the investigation or what it alleged Google had done to breach the law.
Alphabet’s shares, however, were unaffected, rising 1.1%. Some of the company’s key products, including its Google search engine, are already blocked in China and its revenue from the country represents only about 1% of its global sales.
Shares of Intel fell 1% after the Financial Times reported that Chinese regulators were also looking to launch a formal probe into the chipmaker.
(Reporting by Mariam Sunny and Lisa Pauline Mattackal in Bengaluru; Editing by Pooja Desai)
