Jan 6, 2021 - Politics & Policy

Trump uses private companies to ratchet up economic pressure on China

Illustration of President Trump pushing a Chinese flag off screen.
Illustration: Aïda Amer/Axios

President Trump last night signed an executive order prohibiting transactions with eight Chinese apps, including Ant Group's Alipay, arguing they pose a national security threat.

Why it matters: This is the latest example of ratcheting up economic tensions with China, using private companies as pawns.

  • Yes, but: The EO doesn't become effective for 45 days, which is 30 days after Trump departs the White House. Plus, prior Trump EOs against TikTok and WeChat — largely on the same grounds — have been temporarily blocked the courts.

Behind the scenes: A source familiar with the situation says the White House seriously considered including TikTok in this new EO, despite the injunctions. But it didn't make the final cut (yet another win for David Urban).

  • The Trump administration hasn't been terribly successful in its China tech policies, at least based on stated objectives. But it has caused big headaches for Chinese tech companies, some of which also find themselves under novel scrutiny from their own government.
  • In quasi-related news, the New York Stock Exchange says it will delist three Chinese telecom companies in compliance with a different White House EO. NYSE last week said it would delist the companies, then reversed its decision on Monday before reversing it yet again this morning.

What they're saying: "The Chinese Communist Party’s mil-civ fusion strategy explicitly aims to either co-opt or, in cases, even coerce civilian enterprises into assisting with modernization and development of the People’s Liberation Army," a senior administration official told Axios.

  • "We don’t think necessarily that, you know, Americans’ sensitive information and data, either from companies or individuals, should be contributing to that cause."

The big unknown is what Biden will do with the existing EOs, plus the CFIUS order on TikTok. At the very least, their existence should push his administration to set its markers early.

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