Alibaba’s Ma cautions against U.S.-China trade war

Stakeholders in the air cargo industry have been critical of U.S. President Donald Trump’s protectionist rhetoric since before he took office in 2017. Yesterday, Alibaba chairman Jack Ma added to the chorus of disapproval as he discouraged pursuit of a trade war between China and the United States, while embracing “American-led globalization.”

Ma’s commentary on the Alibaba Group’s news hub, Alizila, echoed the same sentiments small business leaders in the U.S. shared with FedEx earlier this year. Industry leaders have acknowledged that global trade in the increasingly digital economy has led to economic growth and higher standards of living across the world.

In his message, Ma pointed out the benefits to the U.S. and China, in particular, with the illustrative example of U.S. tech giant Apple. “The company designs the iPhone and develops proprietary chips and software in California,” but, “It makes the units through contractors that hire millions of workers in China, assembling components manufactured in South Korea,” Ma said. China and South Korea benefit from manufacturing the product, and the air cargo sector benefits from the logistics all that movement requires, but “Americans make almost all of the profits,” which are excluded from balance-of-trade calculations.

Protectionism would not help the American economy and would, in fact, hurt “millions of American small business and farmers,” Ma said, adding, “Any country seeking to increase exports would do better to focus on developing good products and channels to access foreign markets rather than putting up trade barriers.”

Changes happening now in the global economy mean the U.S.-China trade relationship over the next 20 years “will look very different from the past two decades,” but also present enormous opportunity for the U.S., Ma continued. Over the next five years, China is expected to import US$8 trillion in goods thanks to rising incomes and an emerging middle class that set China up to become the world’s largest consumer.

While urging against protectionism, Ma expressed confidence that any setbacks from protectionist rhetoric to-date will be overcome. “Through our digital-commerce platforms, where more than 500 million Chinese consumers shop, Alibaba will continue to help American small businesses and farmers access the China market,” he wrote. To read Ma’s full statement, click here.