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Alibaba Suffers Fresh Setback As Trump Bans Transactions With Alipay

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Alibaba Suffers Fresh Setback As Trump Bans Transactions With Alipay

Mobile applications provided by Alibaba Group Holding Ltd (NYSE: BABA)-backed Ant Group will be banned under an executive order issued Tuesday by outgoing President Donald Trump.

What Happened: U.S. transactions with the Hangzhou, China-based Ant Group’s Alipay, which had over 1.2 billion users worldwide as of October 2019 as per Xinhua, will be banned.

The order will only come into force after Trump leaves office as it is scheduled to be applicable in 45 days' time. 

Apps offered by Tencent Holdings Ltd (OTC: TCEHY) such as Tencent QQ and WeChatPay have also been proscribed under the order, alongside CamScanner, SHAREit, VMate, and WPS Office.

The order underscored the threats posed by Chinese applications, which could permit the Asian power to track the location of Federal employees and contractors and “build dossiers of personal information."

Why It Matters: Trump’s move is the latest setback for Jack Ma-founded Alibaba, which is also facing an antitrust probe in China.

See Also: Chinese Financial Regulators Order Ant Group To 'Overhaul' Its Business

Last August, Trump had signed an executive order to ban ByteDance’s short-form video app TikTok unless its parent agreed to sell the app.

A federal judge had subsequently issued orders to halt the ban on TikTok the following month.

Oracle Corp (NASDAQ: ORCL) and Walmart Inc (NYSE: WMT) agreed to purchase TikTok, prior to the relief granted by the court.

As per the latest reports, Ant Group could be forced to divest a part of its equity portfolio. Chinese regulators are also considering asking the fintech firm to share consumer data, as per a Wall Street Journal report on Tuesday.

Price Action: Alibaba shares traded 2.08% lower at $235.40 in the after-hours trading on Tuesday after closing almost 5.5% higher at $240.40.

 

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