Wednesday 24 / April / 2024
Washington: US President Donald Trump has signed an executive order banning US citizens from carrying out transactions with ByteDance, the parent company of TikTok, on Thursday. The order will become valid in 45 days.
The ban also extends to Chinese company Tencent, which owns chat app WeChat. The order was issued under the International Emergency Economic Powers Act, that can bar US citizens from dealing with sanctioned parties.
The executive order deemed TikTok and WeChat a threat to national security. Trump said that the TikTok app could be used for disinformation campaigns benefiting the Chinese Communist Party. Trump added that data collection by WeChat would "allow the Chinese Communist Party access to Americans' personal and proprietary information."
WeChat shares plummet
Shares in Tencent, plunged in Hong Kong as a result of Trump's order.
The tech firm's market value fell as much as 10% in morning trade before ending the session down 6.75%.
Trump's act wiped almost $50 billion (€42.2 billion) off Tencent's market capitalization, with the company having surged roughly 70% since March as global tech titans benefited from stay-at-home orders aimed at combatting the coronavirus pandemic.
Microsoft interest
The order from the president comes at a time when Microsoft is contemplating buying TikTok's US business as well as the app's operations in Canada, Australian and New Zealand. Earlier this week, Trump said that he would approve of Microsoft or any major US company buying the social media app. Trump also threatened to ban TikTok in the US if an acquisition deal was not arranged by September 15.
On Wednesday, US Secretary of State Mike Pompeo said that the US government was undertaking a "Clean Network" programme to "prevent" Chinese apps and telecoms companies from accessing sensitive information of US citizens.
China had responded by saying that it was unlikely to accept an acquisition of TikTok's US operations and had said it would prevent any deal forced by Trump.
