The orders would ban WeChat and TikTok from operating in the United States in 45 days if they are not sold by their Chinese parent companies —Tencent and Beijing-based ByteDance respectively. Paul Triolo, head of geotechnology at Eurasia Group, described the move as an “unprecedented intervention by the US government in the consumer technology sector.”
Trump claims the apps pose a national security threat and his order outlines fears that the Chinese government could use them to collect personal information on US citizens, such as location data and browsing histories, which could be used for “blackmail and corporate espionage.”
Other major investors in Alibaba and Tencent include big US funds such as Vanguard, BlackRock and T.Rowe Price, according to Refinitiv.
Alibaba’s stock lost 3% in Hong Kong on Friday, signaling that investors were weighing the risks of Trump’s sweeping clampdown on Chinese internet companies. Alibaba’s cloud services, which US businesses use to host their online operations, are most immediately at risk after the Trump administration unveiled its “Clean Network” program earlier this week.
The program is an effort to protect America’s telecom and technology infrastructure from “aggressive intrusions by malign actors, such as the Chinese Communist Party,” Secretary of State Mike Pompeo said in a statement.
The measures apply to telecommunications networks, app developers, cable makers, and cloud services providers, and specifically target Alibaba, Tencent and Huawei.
The program will seek to “prevent US citizens’ most sensitive personal information and our businesses’ most valuable intellectual property, including Covid-19 vaccine research, from being stored and processed on cloud-based systems accessible to our foreign adversaries through companies such as Alibaba, Baidu, and Tencent,” Pompeo said.
China’s Ministry of Foreign Affairs on Friday said it “firmly opposes” the bans on WeChat and TikTok. Ministry spokesperson, Wang Wenbin, said during a daily press briefing that the United States is using state power “to oppress non-American businesses.”
— Sherisse Pham and Julia Horowitz contributed reporting.