In the backdrop of rising tensions between the US and Beijing, US President Donald Trump made an important announcement to impose transactions with China’s Byte Dance and Tencent, owners of video-sharing apps TikTok and WeChat.
With millions of these apps users in the USA, American policymakers have expressed concerns about national security and data protection.
This strategic move falls under the International Emergency Economic Powers Act, which grants the US administration the right to protect the American interests by banning financial trade with certain parties.
After the US’ tough decision to clear out the consulate in Houston, Texas, China ordered the US to vacate its consulate in Chengdu, China.
As a part of the ‘Clean Network’ program, US Secretary of State Mike Pompeo declared that the areas of national focus would be to ensure Chinese Telecom providers and app owners are not privy to sensitive information on the US citizens and businesses.
In light of these developments, Tencent share prices have fallen by 4%. However, Trump has supported the sale of TikTok’s US operations wing to Microsoft on the condition that the US government receives a significant stake in the sales price.
Trump remarked on WeChat that it “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.”
With TikTok’s 100 million users and 3 million WeChat users in the US, Republicans have expressed concern about probable political fallout in the US owing to the upcoming ban.
Earlier this July, India imposed a ban on 47 Chinese apps in its second ‘digital strike’ owing to similar national security and data privacy concerns.