USA stock index futures fell 0.5% following the decision, as China signaled it would hit back over the measures and "urged the US side to immediately correct its mistake". "China will continue to take resolute measures to firmly safeguard its national sovereignty and developmental interests".
The move, which was announced after USA markets closed, came on the same day negotiators from the US and China began working-level preparations for high-level talks due to begin Thursday in Washington.
"The U.S.is anxious that China will take a lead in the era of AI, as the latter does not have too much concern about privacy rights when practicing state-of-the-art technology", said Jonah Cheng, chief investment officer at J & J Investment, and a former veteran tech analyst at UBS. US supplier Ambarella fell 12 per cent in after-hours trading.
Video surveillance company Hikvision said the USA listing had "no factual basis". On Tuesday, the company said that there were "no changes" to those plans, although a banker close to the situation was skeptical.
The varied corporations on the list are speech recognition firm iFlytek Co, surveillance equipment maker Zhejiang Dahua Technology, digital files forensics products maker Xiamen Meiya Pico Recordsdata Co and Yixin Science and Technology Co.
The possibility, nearly particular to draw a intelligent response from Beijing, targets 20 Chinese public security bureaus and eight corporations including video surveillance firm Hikvision, in addition to to leaders in facial recognition abilities SenseTime Neighborhood Ltd and Megvii Technology Ltd. A New York Times investigation in April found the Chinese government was using a huge network of facial recognition software to track Uighur people, and named all three companies as participants in the programme.
The US government has added eight firms specialising in facial recognition to the so-called "entity list" of foreign firms which are banned from trading with US companies.
Washington is adding 28 Chinese companies, government offices and security bureaus to a United States blacklist over their alleged role in facilitating human rights abuses in China's Xinjiang region.
"In Xinjiang, the Chinese government prevents Muslims from praying and reading the Quran, and it has destroyed or defaced a great number of mosques", Sullivan said. China counters that the "vocational training centres" combat extremism.
SenseTime and Dahua weren't immediately available for comment outside of normal business hours.
"The US Government and Department of Commerce can not and will not tolerate the brutal suppression of ethnic minorities within China", Commerce Secretary Wilbur Ross said.
Hikvision, with a market impress of about $42 billion, calls itself the realm's finest maker of video surveillance gear.
Before that, Huawei Technologies had already been added in the US Entity List. On Monday, Trump said he was hoping for a "humane solution" in a city where protests have grown increasingly violent. Some of the firms added to the list trade on Chinese exchanges, which weren't open yet when the announcement was made in the U.S. "It now looks less likely".
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.
Ross said Monday's action will ensure USA technologies "are not used to repress defenseless minority populations".
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