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After TikTok, Alibaba Group Holding Ltd (NYSE:BABA) May Be The Next Target In U.S-China Trade War

Trump’s crackdown on Chinese tech companies does not seem to slow down any time soon after the US president gave the latest indication of extending the crackdown to Chinese e-commerce giant Alibaba Group Holding Ltd (NYSE:BABA). In the latest escalation of conflicts between the world’s two superpowers, the US has been aiming at Chinese tech companies like Tencent’s WeChat, ByteDance’s TikTok, and Huawei.

The Trump administration has launched a pushback against China’s growing tech prowess that has put American companies into stiff completion.

“We are in a paradigm shift, and geopolitics is going through a historic transformation right now,” said Alex Capri, a research fellow at the Hinrich Foundation and senior fellow and lecturer at the National University of Singapore.

The rise of Alibaba

Over the last few years, Alibaba has maintained an upward trajectory presenting stiff competition to America’s leading e-commerce giants like Amazon. In fiscal 2020 ending March 31, Alibaba reported an increase in its turnover by 35% to $72 billion. The e-commerce giant reported a 62% jump in revenue from its cloud services, reporting $5.6 billion.

Alibaba now says it has over 180 million annual active consumers around the world. The company’s cloud segment already has two datacentre regions in the US. One data center is located on the east coast in Virginia, while another is on the west coast in Silicon Valley.

TikTok ordered to be acquired by an American company or exit the U.S

Last week, Trump signed an executive ordering ByteDance, the parent company of TikTok, to sell its American assets to an American company or exit the U.S in 90 days. Trump has accused the Chinese social media app of being a threat to national security. He says the app, which has been gaining much influence, especially among young people, is being used by China to spy on the U.S.

Trump further says there is sufficient evidence to prove that Chinese tech poses a security threat to the country. Microsoft has been the front runner in the race to acquire TikTok. Other companies that have expressed interest include Twitter and, most recently, Oracle.



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