As Trade War Escalates, Alibaba's Jack Ma Takes Back His Promises

Judy Cobb
September 21, 2018

The billionaire previously told Trump before his inauguration in January 2017 that he would commit to creating new jobs but recanted those sentiments Wednesday to a Chinese new outlet, Xinhua, on the heels of a new round of tariffs this week from both countries.

Jack Ma, Alibaba co-founder and chairman, announced back in April when Alibaba purchased Chinese microchip maker Hangzhou C-SKY Microsystems that China needed to control its "core technology" such as chips to avoid over-reliance on USA imports. "That premise no longer exists today, so our promise can not be fulfilled".

Trade analysts and business groups warn that the USA duties and retaliatory tariffs that China imposes on US products will drive up costs and harm consumers in the long run.

Ma's prediction comes after Washington said it would impose duties on an extra US$200bn worth of Chinese imports, prompting Beijing to impose retaliatory taxes on around US$60bn worth of U.S. goods in response.

Ma reflected on his earlier pledge in response to a question posed in a wide-ranging interview with Xinhua, China's official news agency whose views often reflect those of central leaders in Beijing.

Ma met Trump two years ago and laid out Alibaba's plan to bring small US businesses onto its platform to sell to Chinese consumers. China said it will impose retaliatory tariffs against $60 billion of USA goods, ranging from meat to wheat and textiles.

The promise Ma said was based upon friendly U.S.

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It follows remarks by Mr Ma at Alibaba's investor day that the trade tensions could continue for decades.

"The current situation has already destroyed the original premise", he said.

"Trade is not a weapon and can not be used for wars", he added, in an exclusive with Xinhua news agency.

Alibaba's move to back down from its promise has come after a further escalation of the trade war between the world's two largest economies.

Chinese firms with factories in the United States would also face higher costs as they ship US -assembled products back home.

He claimed US President Donald Trump's escalating tariffs battle with Chinese counterpart Xi Jinping has "ruined" his pledge, adding: "But we won't stop working hard to promote the healthy development of Sino-US trade". Even so, it is known that the Alibaba shares have been declining steadily through the year.

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