U.S. President Donald Trump signed an ordinance on Tuesday banning transactions in eight Chinese software applications, including Ant Group’s Alipay, and tensions with Beijing escalated just over two weeks before President-elect Joe Biden took office.
The move, first reported by Reuters, aims to curb the threat to Americans from Chinese software applications, which have a large user base and access to sensitive data, a senior administration official told Reuters.
The order argues that the United States must take “aggressive action” against Chinese software application developers in order to protect national security.
It hires the trading department to determine which transactions should be banned within 45 days under the policy and also targets QQ Wallet and WeChat Pay from Tencent Holdings Ltd. The order also mentions CamScanner, SHAREit, Tencent QQ, VMate and WPS Office.
A US Tencent spokeswoman and the Chinese embassy in Washington did not comment immediately.
“By accessing personal electronic devices such as smartphones, tablets and computers, China-related software applications can access and capture large amounts of information from users, including sensitive personal data and private information,” the executive order states.
Such data collection would allow China to keep track of the locations of federal employees and contractors and to compile dossiers of personal information, the document adds.
The mandate aims to cement Trump’s tough legacy in China before January. Inauguration of Democrat Biden, who said little about how he intends to deal with certain technical threats from China.
However, Biden was able to revoke 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 further escalate tensions between Washington and Beijing, embroiled in a bitter dispute over the origins of the coronavirus and Chinese crackdown on Hong Kong.
Despite the 45 day deadline set in the ordinance, the trading department plans to act before January 1st. 20 to identify banned transactions, another US official told Reuters.
The policy reflects the Trump Executive Orders signed in August instructing Commerce to block some U.S. transactions with WeChat and the Chinese video app TikTok.
Had those orders taken effect, they would have effectively banned the use of the Chinese apps in the US and prevented the Apple Inc and Alphabet Inc app stores from making them available for download to new users.
However, the restrictions have been blocked by courts primarily for reasons of freedom of expression. The White House is confident that the new restrictions will stand up to judicial scrutiny as requests like Alipay would struggle to bring a first-amendment case, the senior administration official told Reuters.
US Commerce Secretary Wilbur Ross said in a statement that he supported Trump’s “commitment to protecting the privacy and security of Americans from threats from the Chinese Communist Party.”
Alipay, the Ant Group’s payment app, has been in Washington’s crosshairs for months.
Reuters reported in November that the US State Department tabled a proposal to blacklist the Ant Group to deter US investors from participating in its lucrative IPO. However, the trading division that oversees the blacklist put the proposal on hold after Alibaba Group Holding Inc. president Michael Evans urged Ross to decline the offer.
Ant is China’s leading mobile payments company, providing loans, payments, insurance and asset management through mobile apps. It is 33% owned by Alibaba and controlled by Alibaba founder Jack Ma, but is currently not available to American users.
Tuesday’s move is the latest in a string of tough new restrictions on Chinese companies.
The White House released an executive order in November banning US investments in suspected Chinese military companies like China’s top chipmaker SMIC and oil giant CNOOC. Last month, the Ministry of Commerce blacklisted dozens of Chinese companies, including Chinese drone maker SZ DJI Technology Co Ltd.