In a statement the U.S. Trade Representative’s office said, it has added Chinese e-commerce sites operated by Tencent Holdings Ltd and Alibaba Group Holding Ltd to the U.S. government’s latest “notorious markets” list.

The “notorious markets” list identifies 42 online markets and 35 physical markets that are reported to engage in or facilitate substantial trademark counterfeiting or copyright piracy.

“This includes identifying for the first time AliExpress and the WeChat e-commerce ecosystem, two significant China-based online markets that reportedly facilitate substantial trademark counterfeiting,” said the USTR’s office in a statement.

China-based online markets Baidu Wangpan, DHGate, Pinduoduo, and Taobao also continue to be part of the list, along with nine physical markets located within China “that are known for the manufacture, distribution, and sale of counterfeit goods,” said the USTR office.

In a statement Alibaba said, it will continue working with government agencies to address concerns about intellectual property protection across its platforms.

Tencent said it strongly disagreed with the decision and was “committed to working collaboratively to resolve this matter.”

Inclusion on the list does not carry any direct penalties, although it erodes their market goodwill.

Industry bodies including the American Apparel and Footwear Association (AAFA) as well as the Motion Picture Association welcomed the release of the report by the USTR.

In a separate report, the USTR’s office also said, the United States needs to pursue new strategies and update its domestic trade tools to deal with China’s “state-led, non-market policies and practices.”

China has failed to make good on its commitments under the “Phase 1” trade agreement signed by former US President Donald Trump.

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