The Trump administration’s next high-profile target in its Chinese trade-war is the hugely popular video-sharing mobile app TikTok, which has been slapped with a 45-day ban in the U.S. from 20 September 2020.

Executive Orders

Chinese apps TikTok (from parent ByteDance) and WeChat (from parent Tencent) have received Executive Orders forbidding “any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States”. The “person” in this order applies to any individual or entity e.g. government, corporation, organisation, or group. This appears to illustrate how the Trump administration would like to see American companies banning the use of TikTok on their devices.

The ban follows the Trump administration’s ban on the use of Huawei’s equipment in communications infrastructure on the grounds that Huawei was viewed to be too close to the Chinese state and, therefore, the use of its equipment could be deemed to pose a national security risk.

TikTok

The White House website states that “TikTok automatically captures vast swaths of information from its users” and that “this data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information”.  The Whitehouse website also says that “TikTok also reportedly censors content that the Chinese Communist Party deems politically sensitive, such as content concerning protests in Hong Kong and China’s treatment of Uyghurs and other Muslim minorities”. 

For these reasons, and that “steps must be taken to deal with the national emergency with respect to the information and communications technology and services supply chain”, the Trump administration has issued the TikTok ban.

WeChat

Similarly, the White house order against the Chinese messaging, social media, and electronic payment app ‘WeChat’ and how it also allegedly captures “vast swaths of information from its users” which could then be accessed by the Chinese Communist Party.  In the case of WeChat, the White House website highlights a report of the discovery of a Chinese database that contains billions of WeChat messages sent from users in China, the United States, Taiwan, South Korea, and Australia.  The website also suggests that WeChat is a mechanism for Chinese Communist Party to keep tabs on Chinese nationals visiting the United States and “enjoying the benefits of a free society for the first time in their lives”.

TikTok and the UK

The ban in the U.S. prompted reports that the UK government was close to allowing TikTok to launch its headquarters in London, which is something that has not gone down well with Trump administration in the U.S.

What Does This Mean For Your Business?

The U.S. represents a big market for app makers and on a commercial level, the ban could be damaging to ByteDance and Tencent, owners of WeChat. Unfortunately, although the U.S. states “real” security concerns and a “national emergency” in the ITC services and supply chain as the reasons for the ban, many see this as politically motivated and as another step in the Trump Administration’s trade-war with the Chinese, which has been further stoked by accusations over the origins of the COVID-19 pandemic. Only recently, the UK’s decision not to use Huawei equipment in the 5G infrastructure was viewed by many as the UK bowing to U.S. pressure.  The future for businesses that have traditionally operated between the U.S. and China looks to be difficult and business opportunities in Chinese markets look less likely as the trade-war and the war of words escalates.