The Trump administration’s crackdown on Chinese companies continues. The impact will also extend to broader private communications, as well as the business of U.S. technology companies. The extent of the impact will depend on the Specific Enforcement Measures of the U.S. Department of Commerce. On Thursday, August 6th, Trump signed two executive orders announcing that any U.S. individuals and entities would be banned from any transactions with Byte Dance, the parent company of TikTok, after 45 days, and that U.S. individuals and entities would be prohibited from doing any transactions with WeChat and its parent company, Tencent.
The executive order says u.S. individuals or entities that violate the rule will face sanctions after 45 days. But the two vaguely worded executive orders do not define “deals” and specifically target which Tencent subsidiaries are. All of this requires Business Secretary Ross to make it clear 45 days after the executive order is issued. The vague wording leaves a lot of room for the United States Government to interpret and implement it.
While it is not clear what we will do in the U.S. after September 20, experts believe that WeChat apps could be off-the-shelf in Apple and Google’s app stores and are not limited to the U.S. If WeChat downloads in the App Store in China are also affected, it will be not WeChat that has been hit the hardest, but iPhone sales in China.
What is the basis for the ban?
In both executive orders, Mr. Trump cited the International Emergency Economic Powers Act (IEEPA) and the National Emergency Law.
The IEEPA, enacted in 1977, authorized the president to declare an “exceptional or exceptional threat to the national security, foreign policy, or economy of the United States” and that such threats “are all or mostly from outside the United States.” The President may then authorize the relevant government departments, such as the Ministry of Commerce or the Treasury Department, to prohibit specific products or services.
After 9/11, then-President George W. Bush invoked the IEEPA to issue an executive order granting the Treasury Greater Commercial Blockade powers to block money exchanges between terrorist groups. In 2019, Trump also cited The IEEPA’s imposition of tariffs on Mexican products, saying illegal immigrants from those countries entering the United States pose a national security threat.
In response to TikTok, owned by WeChat and Byte Dance, Mr. Trump said in an executive order that data collection of the two softwarees posed a national security threat.
As early as July 12, White House trade adviser Navarro said the United States would do more with Tik Tok and WeChat. On July 15th Mr Meadows, the White House chief of staff, also said the US would take action against WeChat and TikTok within weeks, not months.
But techMedia, a technology media article, argues that there is little precedent for the use of these applications to be designated as a national emergency, and that the legality of the order is likely to be called into question.
Mark Lemley, director of the Law, Science and Technology Program at Stanford University, told Interface News that the executive order appears to be problematic on a legal level. U.S. courts also frequently overturn Trump’s executive orders.
In June, the U.S. Supreme Court struck down the Trump administration’s executive order to cancel the Deferred Action for Childhood Arrivals (DACA) program, meaning 650,000 young immigrants will continue to enjoy legal protections from deportation.
A Tencent spokesman said on August 7th that Tencent was evaluating the executive order to obtain full understanding. Byte Dance responded the same day that the Executive Order of the President of the United States did not follow due process of law, which was very shocking and did not rule out going to the United States courts.
The store is highly risky.
As mentioned above, the executive order does not specify how this ban will be implemented, and everything has yet to be determined by the U.S. Department of Commerce.
Mr Thompson, of Curtin University in Australia, previously told Interface News that in the worst-case scenario, the US government could force the blocking of servers at technology companies such as ByteDance, making services unworkable.
But tech media outlet The Verge argues that there is no precedent for U.S. law to block any software in this way, and the White House seems unlikely to continue with such draconian online censorship.
Cliff Burns, a lawyer at Crowell and Moring, a Washington law firm, said Mr. Trump’s executive order could not prohibit people from using WeChat because the federal government could not block personal communications that did not involve financial transactions. This means that WeChat or TikTok are less likely to stop services altogether in the United States.
Given the executive order’s apparent ban on U.S. individuals and entities trading with the parent companies of both apps, the Wall Street Journal notes that this increases the likelihood that U.S. citizens will not be able to download WeChat or TikTok at Apple or the Google App Store.
The worst-case scenario is that Apple and Google may have to remove WeChat and TikTok from their global-run app stores, including the App Store in China.
Given the extent to which WeChat is hard to replace among Chinese users, the most likely blow to the strict US ban is the iPhone sales in China. “If you can’t use WeChat on it, who’s going to buy an iPhone in China?” Paul Triolo, a global technology policy expert at the Eurasia Group, a think-tank, said.
As for Tencent’s other U.S. operations, the Los Angeles Times quoted a White House official as saying late Thursday that the executive order on WeChat would only block WeChat-related transactions, not other Tencent investments, such as Tencent’s large U.S. investments in gaming and music companies. However, the text of the executive order does not exclude the possibility of restricting all Tencent’s business.
Legal sources warned that the “deals” mentioned in the executive order could also include Tencent’s servers running WeChat. U.S. companies, such as Intel, will be limited to providing Products and technologies to Tencent to support WeChat.
Economic issues are politicized.
If the executive order poses a threat to WeChat’s use in the United States, the daily communications of Chinese students overseas, Chinese living in the United States, and Americans who do business with China will be greatly affected.
Sheena Greitens, an associate professor at the University of Texas at Austin, told the New York Times. The downside of this executive order is that it makes it more difficult to communicate directly with ordinary Chinese. “This puts this administration’s policies at odds with its stated other goal, to maintain open and friendly ties with Chinese.”
On August 5th U.S. Secretary of State Pompeo again, citing “national security”, said the Us was stepping up efforts to remove so-called “untrustworthy” Chinese applications such as TikTok and WeChat from U.S. digital networks to prevent “various Chinese applications and Chinese telecommunications companies from accessing sensitive information about U.S. citizens and businesses”, known as the “Clean 5G Network Program.”
Josephine Wolff, an assistant professor of cyber security policy at Tufts University, writes that for years the U.S. government has championed the idea of an open and global Internet that gives users around the world access to the same content and services, and technology companies operating around the world. If the U.S. government now believes that secure data and networks can only come from within its borders, it means that the U.S. is already fundamentally unconvinced of the Internet.
“This is a terrible mistake for countries where the technology industry is heavily dependent on doing business around the world,” the article reads. “From a security point of view, this is also a mistake.”
Reuters also quoted industry experts as saying the executive order made it possible for U.S. companies in China to accidentally lie down. Because Nike, KFC, Starbucks and Amazon U.S. brands all use WeChat’s embedded mini-programs to facilitate transactions and engage Chinese consumers.
Chinese Foreign Ministry spokesman Wang Wenbin stressed on August 7 that the U.S. side will not hesitate to harm the rights and interests of the vast number of U.S. users and companies, put a self-interest above market principles and international rules, wanton political manipulation and political repression, in exchange for its own moral decline, damage to the national image and the international trust deficit, and ultimately will be self-defeating. “We urge the U.S. to listen carefully to the rational voiceof the U.S. and the international community, correct the wrong approach and refrain from politicizing economic issues.”