An already fraught situation became even more convoluted on Tuesday evening in the US when, amid rampant confusion around the NYSE’s position on delisting China’s telco giants, Donald Trump banned transactions with Chinese payment apps.
The new executive order cites Trump’s May 15, 2019, EO and echoes broadsides delivered over the summer, before the White House turned its attention to domestic matters.
In the decree, Trump said that “the pace and pervasiveness of the spread” in the US of mobile and desktop apps “developed or controlled by persons” in China, Hong Kong, and Macau “continue[s] to threaten national security, foreign policy, and [the] economy.”
As such, Trump decided that “action must be taken.” That action includes a prohibition on transactions with “persons that develop or control” Alipay, CamScanner, QQ Wallet, SHAREit, Tencent QQ, VMate, WeChat Pay, and WPS Office.
This is necessary, Trump swears, because the US “has assessed” that Chinese apps “automatically capture vast swaths of information from millions of users in the US, including sensitive personally identifiable” data.
Wilbur Ross dutifully followed up. “I have directed my Department to begin implementing the EO’s directives, including identifying prohibited transactions,” Ross said, in a statement.
This comes after two days of discordant headline hockey from the NYSE on plans to delist China Mobile, China Unicom, and China Telecom. The original announcement, delivered on New Year’s Eve, seemingly underscored the ongoing threat of decoupling between the world’s two largest economies and raised questions around whether Chinese oil majors may be next.
But, on Monday evening, the exchange backtracked, saying it wouldn’t delist Chinese telcos after all. On Tuesday, Steve Mnuchin told the NYSE that he disagreed with the decision to reverse to delisting plans. “Mnuchin entered the fray, calling NYSE President Stacey Cunningham to express his displeasure,” Bloomberg reported, citing unnamed sources, who also said Mark Meadows was involved in the talks, as well as National Security Adviser Robert O’Brien and Larry Kudlow. Apparently, the NYSE is considering reversing its reversal. (I know, I know.)
Now, the market will attempt to sort out the implications of Trump’s assault on Chinese payment apps, which comes at an inopportune time for Tencent and Alibaba, which have enough to worry about at home without Trump trying to get a few more punches in before leaving office later this month.
Jack Ma, wherever he is, is probably not amused, although at this point, one imagines Trump is the least of his worries.
As usual, the administration demurred when it came to citing specific evidence to support the allegations, both implicit and explicit, in Trump’s EO. Instead, O’Brien simply noted that “the Chinese government requires that all commercial companies, big and small, support the Chinese Communist Party’s political objectives.” (Yes, we know, Robert, but thank you for the clarification.)
Tuesday’s order sounded quite a bit like the EOs Trump issued late last summer in conjunction with what turned into a belabored effort to force a shotgun wedding between TikTok and a consortium of US companies and investors on ostensible national security concerns.
The 45-day timeline given in Tuesday’s EO means that, barring another turn for the surreal in D.C., Trump will no longer be president by the time it takes effect. Biden could, one assumes, roll it back once in office.
Just another day in “Cold War 2.0.”
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