Trump orders to ban deals with TikTok, WeChat in USA

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Trump orders to ban deals with TikTok, WeChat in USA

Last Updated : 07 Aug 2020 11:48:25 AM IST

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US President Donald Trump has issued two executive orders prohibiting transactions in the country with the Chinese companies that own WeChat and TikTok.

The prohibition on doing transactions with these two companies by any person in the US will come into effect 45 days following the order which was issued on Thursday.

WeChat is a messaging, social media, and electronic payment application owned by the Chinese company Tencent Holdings Ltd.

Following the executive order, shares in Tencent tanked 9 per cent in Hong Kong.

TikTok, a video-sharing mobile application owned by the Chinese company ByteDance Ltd., has reportedly been downloaded over 175 million times in the US and over one billion times globally.

In the executive order "addressing threat posed by TikTok", Trump said the spread in the US of mobile applications developed and owned by Chinese companies "continues to threaten the national security, foreign policy, and economy of the United States."

"At this time, action must be taken to address the threat posed by one mobile application in particular, TikTok," said the order.

The order said that data collected by TikTok threatens to allow the Chinese Communist Party to access personal and proprietary information of US citizens.

China could potentially use these data to the disadvantage of the US, suggested the order.

Similar allegations were made against WeChat in the executive order addressing "the Threat Posed by WeChat."

Even before the executive orders were issued, the Trump administration raised fears that TikTok could use data of US citizens with the Chinese government.

Both Beijing and TikTok denied the allegations.

The orders were issued amid discussion by Microsoft to purchase the US business of TikTok.

Microsoft revealed its intention to purchase TikTok's US business by September 15, following a discussion between the company's CEO and the US President.

In a discussion with US tech workers earlier this week, Trump said that the country should get a large percentage of the proceeds if part of the short video-sharing platform TikTok's business is bought by an American firm.

Trump said he does not mind if Microsoft, or any other "secure" American company, buys TikTok's business in the US and he also shared the observation with the Microsoft CEO that that it is "probably easier to buy the whole thing than to buy 30 per cent of it."

Meanwhile, reacting to the development surrounding TikTok, state-run China Daily newspaper on Tuesday said that "theft" of a Chinese tech firm would not be accepted by Beijing.