WeChat decision by U.S. Commerce expected by Sept. 20

WeChat decision by U.S. Commerce expected by Sept. 20

In a court filing Wednesday, the Trump administration underscored the complexity of cutting ties with WeChat, a ubiquitous app in China that is also used by many Chinese speakers in the United States, some of whom filed a lawsuit trying to block the government from taking action against the app.

A Trump administration filing in that case said the Commerce Department is still reviewing “a range of transactions” related to WeChat for possible prohibition. The government does not plan to impose criminal or civil penalties on individuals for downloading or using the app for personal or business activities, but users may find the app “impaired” by other steps Commerce takes, said the filing in federal court in San Francisco.

Other steps could potentially include requiring Apple and Google to remove WeChat from their app stores, trade lawyers not involved in the case said.

Tencent declined to comment for this story. The Commerce Department didn’t respond to a request for comment.

WeChat has been described as the Swiss army knife of apps, allowing users to pay bills, order food, book travel, read news and shop online. It’s also a big conduit for Chinese speakers in the United States to communicate with relatives and friends in China.

WeChat built a huge following in part because China blocks its citizens from using Western apps such as Facebook or YouTube, said Scott Kennedy, a China expert at the Center for Strategic and International Studies in Washington, D.C.

WeChat’s dominance means many Western companies that operate in China, from hotel chains to food companies, rely on the app to market their goods there, Kennedy said. Some U.S. businesses are worried that U.S. action against WeChat could prevent them from using the app as a marketing tool inside China, he said.

“Is it just WeChat in the U.S. that will be hit, or is it Hilton can’t take reservations now through WeChat for hotels in China? That would be a big restriction,” he said.

Chinese authorities rely on WeChat to monitor political dissidents and other critics, some of whom have been detained by police or sentenced to prison for their posts on the platform.

In his executive order, Trump said WeChat represents a security threat in the United States by collecting “vast swaths” of data on Americans and other users, and by allowing “the Chinese Communist Party a mechanism for keeping tabs on Chinese citizens who may be enjoying the benefits of a free society for the first time in their lives.”

“WeChat, like TikTok, also reportedly censors content that the Chinese Communist Party deems politically sensitive and may also be used for disinformation campaigns that benefit the Chinese Communist Party,” the order said.

The app is one of Tencent’s best known products, but the tech giant is also the world’s largest online gaming company, a provider of cloud-computing services, and a big distributor of movies and music.

It has an array of business dealings with Western companies, including through licensing entertainment content, and is one of China’s biggest companies, with a market value of $640 billion on the Hong Kong Stock Exchange.

Earlier this year, Tencent led a consortium that bought 10 percent of Universal Music Group, home of Justin Bieber, Katy Perry and Luciano Pavarotti.

The administration’s targeting of Tencent further chills business relations between the world’s largest economies and their tech giants.

“Whether you are a U.S. tech company like Apple or IBM or you are a Chinese tech company like Tencent, you’re sort of caught on both sides, because both sets of companies look at the markets of the other country as very important,” said one U.S. trade lawyer who declined to be named, in order to discuss individual companies.

“They have spent a decade, or decades plural, investing in and expanding in these markets. And now the geopolitics have changed and they’re all finding these investments are at risk,” the lawyer said.

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