Donald Trump stands in front of a lectern
By decree, US President Donald Trump has banned eight Chinese payment service providers in the US. Among them are AliPay and WeChat Pay. It is the latest attack in the raging trade war between the two economic powers.
Donald Trump is in the final days of his presidency. The outgoing US president is now using one of his last acts in office to ban several Chinese payment apps in the US. To this end, Trump signed a decree on 5 January, which can be viewed on the White House website. According to the decree, the American head of state is banning the financial apps of several Chinese companies, including Alipay, the online trading platform The News Spy and WeChat Pay of the internet company Tencent. In addition, CamScanner, QQ Wallet, SHAREit, Tencent QQ, VMate, and WPS Office are also affected. It is one of the latest blow-ups between the Trump administration and China.
The decree will come into force 45 days after it has been passed. Consumers will then no longer be allowed to transact through the payment apps. Transactions that would circumvent the ban are also prohibited. As justification, the still-president cites data protection reasons that concern „national security“. He fears that the government in Beijing would misuse personal data of Americans for espionage purposes. For example, the information obtained from the data could allow China to create dossiers of federal officials. It is a matter of „national security“, Trump said. Moreover, these apps threatened:
In addition, he said, the president has instructed his commerce secretary to be on the lookout for more Chinese companies that pose a national security threat.
Trump’s fight against China enters the next round
In early August last year, Donald Trump announced his intention to ban the popular Chinese video platform TikTok. At the time, he accused ByteDance, the company behind TikTok, of also transferring data of US citizens to the Chinese government. As a result, software giant Microsoft was pressured by the US government to negotiate a deal with ByteDance to take over the business in the US. In December, Trump then faced a major setback after a US court ruled that the president’s push was „not legally covered“.
Specifically, Trump invoked a 1977 law that grants the US president broad emergency powers in the event of extraordinary threats from abroad. However, the law does not restrict the import and export of information or intelligence material or personal communications. According to the judge, TikTok clearly falls into this category. He therefore granted Tiktok’s application for an injunction against the operating ban.
However, the White House might have more success with the current bans, as in the current case the curtailment of information as well as the restriction of freedom of speech might be less given.
Brazil as a sideshow for the US president
In June last year, WhatsApp announced that Brazilian users would be able to make money transfers with the Messenger service. With this, parent company Facebook created a new level of user-friendly financial services. With 120 million Brazilians using WhatsApp at the time, they demoted the local banking sector to simple service providers.
The choice of the largest Latin American country was not accidental. The domestic US market is oversaturated with financial service providers. This is less the case in South America. The potential is enormous and the regulatory hurdles often less high. The main motivation, however, is to secure market share. Thus, there is a fear that the Chinese sphere of influence will expand further through money and digital technologies. The realpolitik conflict, West versus East or USA versus China, is most evident in digital infrastructure issues. It would be a bitter blow to the US and the US president if people from Latin America used Chinese apps like WeChat to conduct their financial and data transactions.