September 23, 2020

Trump’s Orders on WeChat and TikTok Are Uncertain. That May Be the Point.

A spokesman for Tencent, the parent company of WeChat, which is widely used in China and around the world as a messaging and payments app, said it was “reviewing the executive order to get a full understanding.”

The Trump administration has steadily ramped up its actions in a broader economic and geopolitical fight with China, starting with a trade war that put tariffs on hundreds of billions of dollars of Chinese products in 2018 and 2019. It also introduced restrictions on other kinds of Chinese technology, including clamping down on exports to the Chinese telecom giant Huawei.

The sudden, vaguely worded order from the White House on Thursday night, which came without further explanation or a media briefing, followed a familiar model for some of the other policy announcements on China from the Trump administration. Many have left multinational companies in suspense for days or weeks about the specifics.

With policy moves like tariffs and export controls, the Trump administration wielded uncertainty as a source of leverage, using it to frighten companies into compliance and leaving themselves room to back down or escalate the situation.

The executive orders on WeChat and TikTok leave the determination of what constitutes a “transaction” up to the secretary of commerce, Wilbur Ross. According to the language of the orders, Mr. Ross will make that determination in 45 days, meaning it would not be clear to businesses what will be included in the ban until it actually goes into effect.

“It may be that it’s won’t be nearly as bad as people might fear,” said Jason M. Waite, a partner at the law firm Alston Bird, adding that the administration might discover legal or practical concerns with putting the order in place in the interim. “It is a 45-day surprise.”

People familiar with the deliberations said administration officials clearly intended to target the presence of WeChat and TikTok on the Google and Apple app stores, cutting off downloads and updates for the Chinese apps. It is unclear if the restrictions could affect other parts of the Chinese companies’ sprawling portfolios and business dealings, particularly for Tencent.

Article source: https://www.nytimes.com/2020/08/07/business/economy/trump-executive-order-tiktok-wechat.html

Speak Your Mind