In Brief

Trump prohibits transactions with Bytedance and Tencent

Washington D.C.

7 August 2020

President Donald Trump has issued a pair of executive orders banning US transactions with Bytedance and Tencent, the Chinese technology companies that own TikTok and WeChat.

Warning of the need for “aggressive action” to protect US national security, Trump's executive orders will take effect from 20 September and prohibit “any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States”.

The move escalates the growing technology cold war between China and the US. “The spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China (China) continues to threaten the national security, foreign policy, and economy of the United States,” Trump wrote in a letter to House speaker Nancy Pelosi.

The companies targeted by the executive orders are Bytedance, the owner of TikTok, and Tencent, which owns messaging platform WeChat, as well as holding investments in Tesla, Reddit, Spotify and Epic Games.

Bytedance is currently in negotiations with Microsoft to sell it its TikTok service in the United States, Canada, Australia and New Zealand]( Trump has set a deadline of 15 September for the deal to be completed or for the social video app to face an outright ban in the US.

The restrictions on WeChat are likely to have far-reaching consequences. The platform is used around the world, particularly by people of Chinese descent, to talk with friends and family, share news and conduct business. The ban would effectively cut off this means of informal communication between people in the US and China.

The US argues that under a Chinese law introduced in 2017, the nation's tech companies have an obligation to support and cooperate with the country’s national intelligence work by potentially sharing user data.

Trump has cited the International Emergency Economic Powers Act as providing authority for his two executive orders, as well as referencing the National Emergencies Act. The move effectively defines TikTok's operations within the US as a national emergency – a move which is likely to be subject to legal challenge.