Trump Widens China Tech Attack

Trump Widens China Tech Attack, Ordering Bans on TikTok and WeChat

President Donald Trump signed a pair of executive orders prohibiting U.S. 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 U.S. seeks to curb China’s power in global technology. With the U.S. 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. The offshore yuan weakened as much as 0.40%, the most since July 22, to 6.971 a dollar.

“This is yet another watershed moment in the U.S.-China technology cold war here where the U.S. 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 U.S. 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, and it comes a day after Secretary of State Michael Pompeo urged U.S. businesses to remove the two Chinese apps from their stores. It threatens penalties on any U.S. 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 one mobile application, TikTok. Further action is needed to address a similar threat posed by another mobile application, WeChat,” Trump said in the order against WeChat, released minutes after the TikTok measure.

The measure against WeChat blocks all transactions involving the app but it doesn’t amount to a broader ban on dealings with its owner, Tencent, according to a U.S. official. The order against TikTok blocks all transactions in which its owner, ByteDance, or subsidiaries have an interest, the official said.

Earlier this week, Trump threatened to shut down TikTok if its owners didn’t sell the business to a U.S. company by Sept. 15. Microsoft Corp. has been in talks about a possible purchase of TikTok, an app that’s been downloaded more than 2 billion times globally and more than 165 million times in the U.S. The software company is focused on buying the app’s operations in the U.S., Australia, Canada and New Zealand.

Tencent declined to comment. TikTok representatives didn’t immediately respond to requests for comment.

‘Hegemonic Practice’

China said Friday that the U.S. was putting “selfish interests above market principles and international rules” and engaging in “political manipulation and oppression.”

“The relevant businesses follow market principles and international rules in conducting business operations in the U.S.,” Chinese Foreign Ministry spokesman Wang Wenbin told a daily briefing in Beijing on Friday in response to a question about the bans.

“They comply with U.S. laws and regulations, but the U.S. is using national security as an excuse and using state power to oppress non-American businesses,” Wang said. “That is just hegemonic practice.”