Tencent's WeChat in US cross-hairs, faces ban in 45 days

U.S. Commerce Secretary Wilbur Ross will identify transactions covered by the prohibition after the order issued by US President Donald Trump against China's ByteDance and Tencent Holdings takes effect in mid-September.

Trump announced Thursday sweeping bans on U.S. transactions with ByteDance, owner of video-sharing app TikTok, and Tencent Holdings, operator of the WeChat app, starting in 45 days, in a major escalation of tensions with Beijing.

Tencent is listed in Hong Kong. Shares fell by more than 6 percent at the midday trading break.

Trump issued the orders under the International Emergency Economic Powers Act, a law that grants the administration sweeping power to bar U.S. firms or citizens from trading or conducting financial transactions with sanctioned parties.

WeChat is the messaging software developed by  Tencent that has evolved into an all-purpose app for people to make digital payments, conduct e-commerce and more. The app is one of the most popular in the world with more than 1 billion users. It’s not clear how broadly the order would be implemented for Tencent and WeChat. U.S. companies like Starbucks Corp., for example, use the service with consumers in China.

The order from Trump leaves key unanswered questions about the restrictions.
James Lewis, a technology expert with the Washington-based Center for Strategic and International Studies think tank, said the moves appeared coordinated with Pompeo's Wednesday announcement.
"This is the rupture in the digital world between the U.S. and China," he said. "Absolutely, China will retaliate."
Lewis said there are only about 3 million WeChat users in the United States and they are mostly Chinese. "It's much more a collection risk than TikTok. On the other hand, it is collecting on Chinese," Lewis said.
Trump said this week he would support the sale of TikTok's U.S. operations to Microsoft Corp if the U.S. government got a "substantial portion" of the sales price. Nevertheless, he said, he will ban the service in the United States on September 15.
There are 100 million TikTok users in the United States and Republicans have raised concerns about the political fallout of banning the popular app in the United States.
The TikTok app may be used for disinformation campaigns that benefit the Chinese Communist Party, and the United States "must take aggressive action against the owners of TikTok to protect our national security," Trump said in one order.
In the other, Trump said WeChat "automatically captures vast swaths of information from its users. This data collection threatens to allow the Chinese Communist Party access to Americans' personal and proprietary information."
The order would effectively ban WeChat in the United States in 45 days by barring "to the extent permitted under applicable law, 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."-Reuters/Bloomberg/The Standard