Trump huddles with Alibaba, despite piracy pledge

NEW YORK — On the campaign trail, Donald Trump threatened to crack down on China’s “outrageous theft” of U.S. goods. Now, as president-elect, he’s huddling with a company that the U.S. government just labeled as a haven for counterfeits.

On Monday, Trump met privately with Jack Ma, the founder and executive chairman of Alibaba Group, a China-based tech giant whose online platform for small sellers — an eBay-like website called Taobao — has long faced criticism for pirated items sold on its platform.


Entering the meeting here at Trump Tower, a spokesman for Alibaba Group said Trump and Ma would discuss “how Alibaba will create 1 million U.S. jobs by enabling 1 million small businesses” to sell on its site. The aide later declined to specify whether the target is new or exactly how the company would reach it, but exiting the session, Ma told reporters: “We are helping American small business.”

In December, though, the government's primary trade arm, the Office of the U.S. Trade Representative, returned Alibaba to its list of “notorious markets,” an annual roster of websites that it views as facilitating copyright piracy and trademark infringement. Many U.S. manufacturers and sellers told the government that “Alibaba platforms, particularly Taobao, are used to sell large quantities of counterfeit goods,” according to the report.

Trump himself has been especially critical of China for failing to stop the sale of pirated goods: His website pledged he would “use every lawful presidential power to remedy trade disputes if China does not stop its illegal activities,” including piracy. And the president-elect has selected Robert Lighthizer, a China hawk, as his nominee to head USTR. But the issue did not come up at the meeting Monday, according to Alibaba.

"Jack and I are going to do some great things," Trump told reporters after the private gathering Monday. A spokesman for the transition didn't immediately comment for this story.

For Alibaba, the meeting Monday reflects the high stakes for Ma and his enterprise in Trump’s new Washington. After Alibaba raised roughly $25 billion in a record-breaking, historic public offering in 2014, the company embarked on a campaign to attract more U.S. buyers and sellers. But Alibaba must now forge new ties with a president-elect who premised much of his 2016 campaign around slamming China.

Ma previously has expressed optimism about his company's prospects in the U.S. "I don't fear [a Trump presidency],” he told CNN in 2016. “I think a healthy and positive China-U.S. relationship is so critical.”

After the meeting with Trump on Monday, Alibaba described the session as positive. Ma pledged that Alibaba, in working with more U.S. businesses, could help generate more than 1 million U.S. jobs over five years, though the company itself apparently isn't doing the hiring. As part of the effort, Alibaba said it would hold a workshop for small business owners in the Midwest later this year.

While the company did not provide further details, its announcement follows a pattern of corporate leaders who have tried to woo Trump by pledging to hire or invest in the United States, even if the targets they've announced predate his presidency. SoftBank, for example, has attributed its plans for a $100 billion investment fund to Trump's election victory, even though the Japanese conglomerate had publicized its effort much before that.

Alibaba hired its first lobbyists in Washington after its Taobao marketplace landed on the U.S. notorious markets list in 2011. The following year, the company escaped that designation, after the U.S. said it had taken steps to crack down on piracy. But U.S. businesses kept complaining, and those criticisms led USTR to revive its designation in December 2016.

Last year, for example, an organization representing auto parts manufacturers told the U.S. government that the “the majority of automotive parts, tools and equipment marketed with their brands on Alibaba Group’s family of websites are counterfeits.” The American Apparel and Footwear Association also “strongly urge[d] that Alibaba and its constituent platforms, including Taobao” be included on the government’s annual name-and-shame list.

Others, like the U.S. Chamber of Commerce, took aim at China generally. “China and Hong Kong together are estimated as the source for 86 percent of global physical counterfeiting, which translates into $396.5 billion worth of counterfeit goods each year,” the business lobbying group told the Obama administration in October. The U.S. Chamber did not comment for this story.

Alibaba, however, fiercely has defended its platform. "The decision ignores the real work Alibaba has done to protect [intellectual property] rights holders and assist law enforcement to bring counterfeiters to justice," Michael Evans, president of Alibaba Group, said in a statement in December. "The more than 100,000 brands that operate on Alibaba’s marketplaces cannot all be wrong — they are a clear demonstration of the trust that rights holders place in us. We question whether the USTR acted based on the actual facts or was influenced by the current political climate."

Doug Palmer contributed to this story.