In the latest escalation of Trump’s conflict with Beijing, the US Treasury Department was drafting curbs that would block firms with at least 25 percent Chinese ownership from buying US technology firms.

The Wall Street Journal said the Commerce Department and National Security Council were proposing “enhanced” export controls to keep such technologies from being shipped to China, increasing uncertainty from Silicon Valley to Wall Street. The S&P 500 dropped 1.8 percent on Monday.

US chipmakers could face tariffs on products manufactured in China that are built with US components.

Intel, Texas Instruments and Micron have large factories in the United States and export their chips to countries including Mexico, Malaysia and Vietnam for additional testing and assembly. From those countries, the finished products are shipped to China, where they go into manufactured products.