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U.S. President Donald Trump on Tuesday signed an executive order banning transactions with eight Chinese software applications including Ant Group’s Al-Pay mobile app, the White House said, raising tensions with Beijing two weeks before Elected President Joe Biden assumes office.
The move, first reported by Reuters, is aimed at curbing the threat to Americans containing Chinese software applications, with a large user base and access to sensitive data, a senior administration official told Reuters.
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The order states that the United States must “act aggressively” against developers of Chinese software applications to protect national security.
It instructs the Department of Commerce to determine within 45 days which transactions are prohibited under the Directive, and is also directed at the QQ Wallet and WeChat Pay of Tencent Holdings Ltd.
The order also mentions CamScanner, SHAREit, Tencent QQ, VMate published by Alibaba Group’s subsidiary UCWeb, and the WPS office of Beijing Kingsoft Office Software.
Kingsoft said in a statement released by Chinese state media that he did not expect Trump’s order to have a material impact on the business in the short term. Ant and Biden’s transition team declined to comment.
Alibaba, Tencent, CamScanner, SHAREit and the Chinese Embassy in Washington did not immediately respond to requests for comment.
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“By accessing personal electronic devices such as smartphones, tablets and computers, software applications connected by Chinese can access and store large pieces of information from users, including sensitive personally identifiable information and private information,” the executive order reads.
Such data collection “will enable China to track the locations of federal employees and contractors and compile dossiers of personal information,” the document adds.
The order is aimed at confirming Trump’s difficult legacy for China ahead of the January 20 inauguration of Biden, a Democrat, who said little about how he intends to address specific technological threats from China.
However, Biden was able to withdraw the order on the first day of his presidency, although his transition team did not immediately respond to a request for comment on the matter.
The order is likely to increase tensions between Washington and Beijing, which are embroiled in a bitter dispute over the emergence of the coronavirus and a Chinese repression of Hong Kong.
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Despite the 45-day timeline set out in the order, the Department of Commerce plans to act before Jan. 20 to identify banned transactions, another U.S. official told Reuters.
The directive reflects Trump’s executive orders signed in August, which trade to block some US transactions with WeChat and the Chinese video app TikTok.
If these orders went into effect, it would have effectively banned the use of Chinese apps in the United States and prevented Apple Inc and Alphabet Inc’s app stores from downloading them to new users.
However, the restrictions were blocked mainly on the grounds of freedom of speech by courts. The White House is confident that the new restrictions will be able to withstand the judicial inquiry, as applications such as Alipay are struggling to bring an initial amendment case, the senior administration official told Reuters.
US Trade Secretary Wilbur Ross said in a statement that he supported Trump’s “commitment to protect the privacy and security of Americans from threats posed by the Chinese Communist Party.”
Alipay has been in Washington’s crosshairs for months.
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Reuters reported in November that the U.S. State Department had submitted a proposal to add Ant Group to a blacklist to deter U.S. investors from participating in the lucrative initial public offering. But the Department of Commerce, which oversees the blacklist, suspended the proposal after Michael Evans, president of Alibaba Group Holding Inc., urged Ross to reject the bid.
Ant is China’s dominant mobile payment company offering loans, payments, insurance and asset management services via mobile applications. It is 33% owned by Alibaba and is controlled by Alibaba founder Jack Ma, but is not currently available to US users.
Alipay has been downloaded 207,000 times from Apple’s US app store and Google Play in 2020, while the app scanning app CamScanner and the office suite app WPS Office have been downloaded 4.4 million and 563,000 times, respectively, according to research firm SensorTower.
Tuesday’s move is the latest in a series of tough new curbs for Chinese companies.
The White House issued an executive order in November banning U.S. investment in suspected Chinese military companies, including China’s leading disk maker SMIC and oil giant CNOOC. Last month, the Department of Commerce added dozens of Chinese companies, including Chinese drone manufacturer SZ DJI Technology Co. Ltd., to a blacklist.
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(Reporting by Alexandra Alper and David Shepardson in Washington; additional reporting by Brenda Goh and Josh Horwitz in Shanghai; Pei Li in Hong Kong; editing by Matthew Lewis, Leslie Adler and Lincoln Feast.)