Outgoing US President Donald Trump signed an executive order on Tuesday to ban payments and transactions through eight applications run by Chinese companies. The initiative concerns some of the most popular systems such as Alipay (Ant Group group, affiliated with Alibaba) and WeChat Pay (Tencent) and is part of the measures decided by the Trump government in the context of the so-called “trade war” against China. The executive order will take full effect in 45 days and will therefore fall under the presidency of Joe Biden, who will take office on January 20: it is currently unclear whether it will be maintained or reviewed by the new administration.
As happened in the past with similar measures, in the new executive order the indications are rather broad and generic: the text indicates that any transaction carried out “by people who develop or control” some of the most famous and used apps in China for payments will be prohibited. In addition to Alipay and WeChat Pay, CamScanner, QQ Wallet, SHAREit, VMAte, WPS Office and Tencent QQ systems are involved. Their managers are accused by Trump of using solutions to collect large amounts of data to benefit economically and strategically, putting US national security at risk.
However, the effects of the executive order are likely to be limited, as most of the affected users are resident in China. Alipay services can usually only be activated if you have a current account in a Chinese bank and if you have a mobile number issued in China; similar constraints are envisaged by other payment system operators involved in the new limitations. Especially Chinese citizens who live in the United States and maintain economic relations with China, for example to buy goods or send money, may have problems.
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Over the next 45 days, the US Department of Commerce will be tasked with identifying the types of transactions that should be banned. The executive order also contains some other guidance to carry out an analysis of how Chinese payment apps handle their users' data and what policies to adopt to prevent the alleged data transfer.
Given the timing, the task of fully implementing the executive order will lie with the new Biden administration. In recent months, during the electoral campaign for the presidential elections, Joe Biden had hinted at the desire to review trade policies with China by intervening on the numerous limitations imposed by Trump in his mandate. However, it is not clear what will become of this new executive order, as part of the announced policies to normalize relations with the Chinese government.
In four years as president, Trump has issued various measures against Chinese companies, even imposing tariffs on the import of particular goods from China. In the technological field, for example, his administration has issued severe restrictions against Huawei, a Chinese company among the largest manufacturers of smartphones in the world and of systems for building cellular networks.
Last fall, the Trump administration also issued executive orders to ban TikTok and WeChat in the United States. Both measures have led to legal disputes, and the two services continue to be normally available to Americans. The appeals could also affect the new executive order, delaying its entry into force.
