Trump bans dealings with TikTok, WeChat2 min read . Updated: 07 Aug 2020, 10:52 PM IST
- American residents barred from doing business with Chinese app firms
- The bans mark a significant escalation as the US seeks to curb China’s power in global technology
US President Donald Trump signed a pair of orders prohibiting US residents from doing business with the Chinese-owned TikTok and WeChat apps beginning 45 days from now, citing the national security risk of leaving Americans’ personal data exposed.
The bans mark a significant escalation by Trump in his confrontation with Beijing as the US seeks to curb China’s power in global technology. With the US election less than 90 days away, Trump is making his challenge of China a central theme of his campaign, where he trails Democrat Joe Biden in the polls.
Shares of WeChat’s owner, China’s Tencent Holdings Ltd., fell as much as 10% in morning trading on Friday and sliced almost $70 billion from its market value. The offshore yuan weakened as much as 0.45%, the most in two weeks.
“This is yet another watershed moment in the US-China technology cold war where the US government is targeting these two very popular Chinese apps and basically saying they have national security problems," said Paul Triolo, head of global technology policy at Eurasia Group. “It shows the depth of the US concern."
The move coincides with Trump’s push for the sale of TikTok, the popular video app owned by ByteDance Ltd, to an American company. It threatens penalties on any US resident or company that conducts transactions with TikTok, WeChat or their owners after the orders take effect.
“To protect our nation, I took action to address the threat posed by TikTok. Further action is needed to address a similar threat posed by WeChat," Trump said.
While WeChat hasn’t been widely adopted in the US, the ban would still have broad implications because it’s used by more than a billion people and is central to business and social communications with China. The measure blocks all transactions involving WeChat, but doesn’t amount to a broader ban on dealings with Tencent, according to a US official. The order against TikTok blocks all transactions in which its owner, ByteDance, or subsidiaries have an interest, he said.
Earlier this week, Trump threatened to shut down TikTok if its owners didn’t sell the business to an American company by 15 September. Microsoft Corp. has been in talks about a possible purchase of TikTok’s operations in the US, Australia, Canada and New Zealand.
TikTok said in a blog post that it is “shocked" by the order and will pursue all remedies available, including the US courts. Tencent said it is reviewing the executive order to get a full understanding.
A Chinese official said that the US was putting “selfish interests above market principles and international rules" and engaging in “political manipulation and oppression".
Trump’s executive order likely means WeChat gets bumped off Apple Inc. and Google’s app stores in 45 days.