The U.S. will ban some transactions over WeChat app and prohibit new downloads of WeChat and TikTok’s app starting Sunday.
The U.S. moved to expel the Chinese-owned WeChat and TikTok apps from U.S. app stores as of Sunday, while reserving the right to reverse a ban on TikTok’s video-streaming service once it can hammer out a deal to satisfy national security concerns.
Commerce Secretary Wilbur Ross said Friday that the U.S. will prohibit cash transfers within the U.S. related to WeChat and its parent company Tencent Holdings Ltd. Other measures prohibited as of Sept. 20 include distribution, maintenance and updates of WeChat or TikTok through app stores in the U.S.
The order doesn’t apply to operations or cash transfers with Tencent outside the U.S., which had been a concern of some U.S. tech companies.
The Commerce Department restrictions lay out two, largely separate timelines for WeChat and for TikTok. Restrictions for both go into effect on Sept. 20, but Tiktok transactions won’t be impacted until Nov. 12, allowing the video app additional time to hammer out a deal with Oracle Corp. that satisfies the Trump administration. If the national security concerns are resolved by then, the prohibitions may be lifted, the Commerce Department said.
“Our rule is not doing the same thing to WeChat as to TikTok,” Ross said on Fox Business. “Americans will still be able to use WeChat for payments in China. WeChat U.S. for all practical purposes will be shut down.”
Ross said that the two apps, both owned by Chinese companies, are being handled very differently. “For TikTok, it’s just upgrades, maintenance and things like that that will be shut down at this stage, the real shut down would come after Nov. 12 in the event there is not another transaction,” Ross said.
Oracle shares were little changed at $60.07 Friday morning in New York. Tencent’s American Depositary Receipts were also little changed at $66.85.
Privately, the initial reaction from American businesses was positive because the scope of the WeChat ban has been limited to U.S. transactions — which was the main goal of a coordinated lobbying push leading up to the Sept. 20 deadline, according to people familiar with the matter.
Current Users
The Commerce restrictions place the onus on Apple Inc. and on Alphabet Inc.’s Google to delete both the Tiktok and WeChat apps from their U.S. app stores by Sept. 20.
Apple and Google are ready to comply with the deadline, after administration officials worked in multiple discussions with the companies to ensure that there’s no risk of confusion as the ban is applied, according to a U.S. official.
The ban won’t immediately impact current users or force them to delete the apps from their phones. In addition to eliminating WeChat and TikTok from app stores, it will cut off access to developer tools, preventing new downloads and subsequent software updates to current users. That, in effect, could render the app inoperable in the long run.
The Commerce announcement doesn’t specify under what authority the administration is banning the apps and transactions involving the apps, and there’s no enforcement provision to ensure individuals delete them from their devices and don’t find work-arounds to update them.
Google, Apple, and Tencent didn’t immediately respond to requests for comment. Tiktok declined comment.
The ban could still impact U.S. companies that allow payment via WeChat, since the restrictions prohibit services through the WeChat mobile app for the purpose of transferring funds or processing payments within the U.S. While Tencent’s WeChat has a small footprint in the U.S., with only 19 million daily users, it has more than a 1.2 billion users in China and around the world. Tiktok has 100 million users in the U.S. and has been downloaded more than 2 billion times globally.
National Security
“The Chinese Communist Party (CCP) has demonstrated the means and motives to use these apps to threaten the national security, foreign policy, and the economy of the U.S,” the Commerce Department said in a statement Friday.
The Commerce Department held a number of briefings in late August with companies and lobbying groups who scurried to figure out what the potential ban could mean to their companies, according to people familiar with the matter. Some American tech firms pressed the Trump administration to let them continue to do business with the Chinese firm through their operations in Asia and to allow American citizens to use the apps there.
Industry executives telephoned and wrote a flurry of letters — including Apple Chief Executive Officer Tim Cook, who discussed the matter with Wilbur Ross — but Commerce officials reassured them it would be a narrow ban, according to the officials.
The restrictions on WeChat were never considered to be a broad ban, according to two U.S. officials, who said that barring businesses from using the popular messaging app in China was not the intention.
Trump first announced the restrictions on Aug. 6 and said that details would come at the end of the 45-day timeframe laid out in that initial order.
ByteDance has been negotiating with Oracle to take a stake in a reconfigured TikTok to alleviate the president’s concerns about data on the app’s American users being exposed to China.