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Trump orders ban on transactions with TikTok and Tencent

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US President Donald Trump has signed a pair of executive orders forbidding transactions with TikTok parent company ByteDance and WeChat parent company Tencent. Trump claims that the Chinese apps are national security threats.

Trump described TikTok (a video-sharing app wildly popular among young Americans) and WeChat (a messaging, social media and payments app widely used in China and by the Chinese diaspora) as posing a “national emergency”. He claimed that Chinese apps threaten national security, foreign policy, and the economy of the US.

The executive orders come amid escalating tensions between the White House and Beijing. Trump has specifically targeted tech companies such as Huawei, ZTE and ByteDance in his attacks on China, restricting their freedom to do business in the US and US allies.

The first executive order will come into force in 45 days and forbid unspecified transactions with TikTok parent company ByteDance or its subsidiaries. The second introduces similar restrictions on transactions with WeChat parent company Tencent. The orders cite the National Emergencies Act and the International Emergency Economic Powers Act.

The first order claims that: “TikTok automatically captures vast swaths of information from its users, including internet and other network activity information such as location data and browsing and search histories. This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and propriety information, potentially allowing China to track the locations of federal employees and contractors, build dossiers of personal information for blackmail, and conduct espionage.”

While investigations appear to show that TikTok does collect vast quantities of user data – including data from minors in violation of the Children’s Online Privacy Protection Act – TikTok maintains that US user data are stored on local servers, with strict restrictions on employee access to these data.

TikTok has already been banned on the phones issued to employees of various government agencies and some private companies.

The second order makes similar claims about WeChat: “WeChat, like TikTok, also reportedly censors content that the Chinese Communist Party deems politically sensitive and may also be used for disinformation campaigns [...] the US must take aggressive action against the owner of WeChat to protect our national security.”

Tencent is one of the world’s largest companies. While it is recognised in China for its vast range of offerings covering internet services (including search, ecommerce and social media), entertainment, AI services and more, it is best known in the US as the world’s largest video-gaming company. It is the sole owner of 'League of Legends' maker Riot Games, and owns 40 per cent of 'Fortnite' maker Epic Games.

Writing on Twitter, esports expert Rod Breslau commented: “Trump may have just unintentionally technically tried to ban financial payments to Riot Games, Epic Games, 'League of Legends', 'Valorant', 'Fortnite', and half the gaming industry by clamping down on Tencent.”

In response, TikTok has raised the possibility of taking legal action against the US over the executive order, saying that it will “pursue all remedies available”. Tencent told media that it is still reviewing the executive order to get a full understanding of the situation.

ByteDance is in discussions with Microsoft to reach an agreement in which Microsoft would acquire TikTok. The companies hope to conclude discussions within weeks in order to keep TikTok operating in the US. According to recent reports, TikTok could be worth as much as $30bn and Microsoft is hoping to acquire its global operations.

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