U.S. Secretary of State Mike Pompeo said President Donald Trump’s executive orders against TikTok, WeChat could be broader.
Analysts believe that Pompeo's remarks could be about Trump's action against other Chinese apps or TikTok’s parent company ByteDance, or WeChat owner Tencent.
“So when President Trump made his announcement about not only TikTok, but about WeChat – and if you read it, it’s broader even still than that – is that we’re going to make sure that American data not end up in the hands of an adversary like the Chinese Communist Party, for whom we have seen data uses in Western China that rival the greatest human rights violations in the history of mankind,” Pompeo said during a speech in Prague, Czech Republic.
Trump's executive orders cite both Tencent and ByteDance. One of the executive orders bans “any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States, with ByteDance Ltd. ... Beijing, China, or its subsidiaries, in which any such company has any interest” as identified by the U.S. Secretary of Commerce.
Another executive order prohibits “any transaction that is related to WeChat by any person, or with respect to any property, subject to the jurisdiction of the United States, with Tencent Holdings Ltd. ... Shenzhen, China, or any subsidiary of that entity.”
"Transaction"
The executive orders are reportedly vague and do not define “transaction." However, Pompeo’s statements hint that the action could be broader than the apps.
Pompeo’s comments come after Tencent executives downplayed the impact of White House's moves.
“WeChat and Weixin are two separate products, with WeChat serving our International users,” John Lo, chief financial officer of Tencent, said on the company’s earnings call on Wednesday. Weixin is the version of WeChat for mainland Chinese users.
“Based on our initial reading and subsequent press reports the executive order is focused on WeChat in the United States and not our other businesses in the U.S,” he said. “We are in the process of seeking further clarification from relevant parties in the U.S.”
Advertising
The company reported that the US represents less than 2% of Tencent’s global revenue and less than 1% of total advertising revenue.
James Mitchell, chief strategy officer at Tencent, said he does not believe that US companies displaying ads on Tencent platforms in China will be affected as the executive order covers only the US jurisdiction.
Prior to the issuance of the executive orders, Trump said he demanded a “substantial portion”of the purchase price during a call he had with Microsoft regarding it’s possible deal for the US unit of TikTok.
He also warned that he will ban Chinese tech firm ByteDance’s video sharing app if no deal has been signed by September 15. ByteDance is being pressured to sell its US business after Trump declared a possible ban on Chinese tech companies.
According to Treasury Secretary Steven Mnuchin, the US government was conducting a national security review of TikTok and was was preparing to make a policy recommendation prior to the issuance of the orders.
However, TikTok spokesperson Josh Gartner issued a statement saying: “TikTok is loved by 100 million Americans because it is a home for entertainment, self-expression, and connection. TikTok will be here for many years to come.”
