By William Mauldin 

WASHINGTON -- The U.S. warned companies that have suppliers or customers in China of legal and reputational risks linked to human-rights violations there, part of the Trump administration's broader effort to limit business ties with the country.

Companies face peril for involvement with entities blamed for human-rights abuses, including forced labor or the mass detention of Uighur Muslims in China's Xinjiang region, according to a 19-page memo released Wednesday from the Commerce, Treasury, Homeland Security, and State departments.

The memo repeatedly cited technology companies whose products can be used for the surveillance of Uighurs.

"CEOs should read this notice closely and be aware of the reputation, economic and legal risks of supporting such assaults on human dignity," Secretary of State Mike Pompeo told reporters on Wednesday.

A spokesman for the Chinese embassy in Washington urged the U.S. to "respect facts, drop biases, stop wrongful words and deeds that harm others and themselves and stop meddling in China's domestic affairs with Xinjiang as a cover." Beijing says that its efforts in northwest China are meant to counter extremist tendencies among Turkic Muslims.

The Trump administration notice doesn't have legal force and won't add new rules for businesses. Still, the coordinated warning from four U.S. agencies is a signal that the Trump administration will enforce the laws on the books in ways that could make many companies think twice about doing business in China.

"It's intended to remind businesses that there are sanctions in place, that the situation in Xinjiang is dire, and, most important, that the U.S. government intends to enforce existing law and regulations, meaning more aggressively than they have been in the past," said Bill Reinsch, a trade expert at the Center for Strategic and International Studies in Washington.

Besides elevating human-rights concerns on mainland China, the U.S. Congress and the Trump administration are also pressuring Beijing over the new national security law it applied in Hong Kong, furthering an effort to quash dissent and reduce the island's autonomy. Washington has also waged a trade war with China. A "phase one" trade deal in January serves as a truce but didn't remove tariffs on hundreds of billions of dollars of annual U.S. imports from China.

President Trump has faced criticism over what is seen as his lack of dedication to addressing human-rights issues abroad, including China's building of detention camps for more than one million Uighur Muslims without trial, according to estimates by academic researchers. Former national security adviser John Bolton, citing conversations with a U.S. interpreter and one of his deputies, said in his recent book that Mr. Trump told Chinese President Xi Jinping that Beijing should go ahead with building the camps. Mr. Trump avoided pressing China over human rights for fear of jeopardizing a trade deal, Mr. Bolton said.

The timing of Wednesday's coordinated government memo on the sanctions is "probably related to reports of what the president told Xi Jinping about the Uighurs and is an effort to offset some of the political damage his alleged comments caused," Mr. Reinsch said.

Mr. Trump disputed Mr. Bolton's account in an interview with The Wall Street Journal and last month signed the Uighur sanctions bill that passed Congress with broad support.

The Uyghur Human Rights Policy Act, one of several laws mentioned in Wednesday's memo, directs presidents to apply sanctions to people in China linked to certain actions against Muslim ethnic groups in Xinjiang.

Write to William Mauldin at william.mauldin@wsj.com

(END) Dow Jones Newswires

July 01, 2020 19:24 ET (23:24 GMT)