Jack Ma, the Chinese e-commerce billionaire, is walking back on the promise he made a few months ago that Alibaba would create one million US jobs. Ma said that the escalating trade war between the US and China has dimmed the promise of creating these jobs. Ma also noted during the investor day at Alibaba that there’s a real risk that these trade tensions could continue longer than most people think.
Alibaba held its IPO in the US recently raising billions in US capital. One of the key targets for Ma and his team was to expand Alibaba’s e-commerce business into the US market. In fact, the Alibaba founder met with President Donald Trump back in 2017 to outline his company’s plan to increase its presence in the US and strengthen the relations between the two countries. It seems that despite these efforts things haven’t gone according to the plan.
At the time, Alibaba said that its platform will give US companies and businesses easy access to Chinese customers. But Ma is growing less confident that this will happen. He argues that such market access can only be built on the foundation of strong China-US political and economic relations. The escalating trade war between the two countries has dampened any hope of achieving this and as such, it’s becoming increasingly difficult to promote any form of economic collaboration between companies from both these countries.
However, Ma remained optimistic that despite the current challenges, there’s still an opportunity for both countries to do more in developing Sino-US trade. He said that while there’s no doubt that trade in the world needs to be perfected, it shouldn’t ever be used as a weapon. According to Ma, countries can use trade to strengthen relations and promote peaceful coexistence around the world.
Alibaba looked poised to make massive steps in expanding its presence in the US last year. The company announced major investments in US companies such as Jet.com and Snapchat, and also wanted to launch a new e-commerce website in the country. The plan was that these investments would play a central role in generating jobs for Americans.
President Trump was also excited about these prospects after meeting Ma in 2017. Trump said at the time that he and Ma were going to do great things together.
But since then, any effort by Alibaba to move forward with its US master plan has been torpedoed by the worsening relations between the two countries. For instance, a proposal by the Chinese e-commerce giant to acquire American money transfer service MoneyGram fell through due to increasing tensions.
The Trump administration first enacted protectionist trade tariffs targeting Chinese goods worth $50 billion earlier this year. China then retaliated with tariffs of its own most of which were targeting US farmers. The White House has since tightened its stance in this escalation after announcing 10% tariffs for $200 billion worth of Chinese goods. Despite an attempt by both Beijing and Washington to diplomatically solve the issue, there hasn’t been any real progress so far.