Donald Trump could be targeting Alibaba

  •   18/08/2020 - 11h11
  •   HARMANT Adeline

On August 15, Sunday, Donald Trump announced that he may target the Alibaba group as part of his crackdown on Chinese technology companies. However, this company generates most of its revenues abroad although its presence in the United States is still relatively weak.

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Donald Trump could be targeting Alibaba
Image copyright: Daniel Cukier

Donald Trump's statements from this Sunday :

It was in response to a question asked during his press conference on August 15 that Donald Trump suggested that he was looking at other Chinese companies including the Alibaba group. But it is unclear whether the U.S. president was talking about concrete action or not.

Chinese experts believe that Donald Trump's main goal is his re-election and that an offensive against the online giant is still possible and even probable. The two target areas here would be cloud computing and microchips. But this should not really impact the activities of the group which, although it is indeed trying to expand its presence in the USA, makes most of its turnover on the Chinese market. In total, the international e-commerce activities of the Chinese company represent only 8% of its turnover.

It must also be said that a crackdown on Alibaba could also harm American interests because many US companies have been involved in the repression of Alibaba.american companies are using this platform to market their products, such as Apple and Nike who recently set sales records thanks to this partner.

For its part, Alibaba had announced in June and in the context of the Covid-19 pandemic, that it would provide new financing and freight forwarding services for small and medium-sized businesses in the United States and would launch virtual trade shows to help American manufacturers and wholesalers sell their products on the platform.

 

A decision that would also penalize American shareholders :

Another aspect that would make Donald Trump's attack on Alibaba unpopular with voters is the fact that apart from the sales of US companies on this platform, this initiative would also penalize US investors who hold shares in the Chinese giant. Indeed, it should be recalled that at present, the largest shareholder in the Alibaba Group's capital is the American company BlackRock. Other American companies also have a stake in this Chinese company, including the Vanguard Group, Proce T Rowe Associates and JP Morgan Chase.

Although the above elements argue in favour of maintaining stable links with Alibaba, analysts are convinced that Donald Trump is only focusing on his potential re-election. Weakened by his mismanagement of the coronavirus crisis and faced with one of the biggest economic crises in the country's history, the US president has only his repressive measures against China and its companies to obtain voting intentions and therefore intends to target companies such as Tencent and Alibaba.