Amid an escalating trade war with the U.S., a key Chinese business executive voiced confidence Thursday in the communist government’s ability to support rising consumer demand.
To date, the U.S. has imposed tariffs on $50 billion worth of Chinese goods, and President Trump has threatened to raise that amount to as much as $500 billion. The Chinese government, which has been retaliating in kind, previously warned of additional 5 to 25 percent tariffs on $60 billion worth of goods.
While U.S. executives are wary of the looming impacts of the trade skirmish, Joseph Tsai, executive vice-chairman and co-founder of the Alibaba Group, brushed aside any concern. The e-commerce and technology giant, often referred to as the Chinese Amazon, doesn’t expect to be hurt by new tariffs because it relies mainly on domestic production, he told investors.
“We believe the Chinese government policy will continue to support imports in China to satisfy the rising demand of Chinese consumers,” Tsai said on the company’s earnings call. “If U.S. goods become too expensive due to tariffs, Chinese consumers can shift to domestic producers.”
Tsai said Alibaba’s focus remains on “helping American farmers and small businesses” sell products in China.
The U.S. and China began new talks Wednesday in an effort to end the trade battle. Top White House economic advisor Larry Kudlow previously said the Chinese economy is “terrible,” and officials are reportedly hoping that will force Beijing to bow to the Trump administration’s demands.
Tsai told investors the Chinese economy “will continue to be resilient” because of strong domestic consumption.
Revenue at Alibaba surged 61 percent to $12.2 billion in the earnings quarter that ended on June 30. The increase was supported by sales growth of 61 percent in e-commerce and 93 percent in cloud computing.
Net income fell 41 percent to $1.3 billion, which Alibaba attributed to a one-time increase in share-based compensation.
