Why it matters: It is unclear whether the orders will effectively ban the Wechat and Tiktok apps themselves in the US.
- On the face of it, the order on Bytedance seems to complicate Tiktok’s sale to Microsoft. But US outlets report the White House is in favor of this particular transaction and is in fact trying to speed it up by setting a tight deadline.
- It also threatens to disrupt Tencent’s gaming operations in the US. Tencent owns significant stakes in some of the US’s biggest gaming studios, such as Epic Games, developer of Fortnite; and Riot Games, the studio behind League of Legends.
- The executive orders come a day after the US Secretary of State Mike Pompeo escalated the tech war with a new initiative. He promised to purge US networks from Chinese technology under the “Clean Network” program.
Details: The orders ban “any transaction” by any person or company under US jurisdiction with Bytedance, and any transactions with Tencent that relate to Wechat. The Secretary of Commerce is tasked with identifying these transactions until September 15.
- The ban could mean that the apps are banned from the app stores of US companies like Apple and Google, or that Wechat Pay will not work with US credit cards.
- The executive order on Wechat claimed the app “automatically captures vast swaths of information from its users,” which “threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information.”
- Tiktok, on the other hand, could be used by the Communist Party for disinformation campaigns, Trump said in the other order.
Context: The techwar between the US and China has seen major escalations in the last week, with Tencent and Bytedance the latest of China’s tech champions joining Huawei on the White House’s bad side.
- Yesterday, Pompeo said the US would take action to dispel Chinese telecoms carriers, cloud providers, and apps from American networks, as well as investigate undersea cables for Chinese espionage.