Once Again Shooting Ourselves in the Foot: Banning Trade With WeChat Parent Tencent Only Hurts the U.S. Economy
August 7, 2020
Nigel Cory, Robert D. Atkinson, and Daniel Castro
The Trump administration’s recent bans of Chinese-owned apps TikTok and WeChat are based on vague, unspecified cybersecurity and privacy grounds. But the possible prohibition on U.S. companies selling to Tencent, owner of WeChat, or using its services to sell their own products in China does nothing to protect the security or privacy of Americans. It only harms U.S. companies and jobs.
President Trump signed executive orders on August 6 that essentially prohibit U.S. entities (45 days after the orders’ signing) from conducting transactions with TikTok owner ByteDance or WeChat and its owner Tencent. The orders are based―without any evidence―on the vague notion that the spread of mobile applications developed and owned by Chinese companies threatens U.S. privacy and cybersecurity. Alongside Secretary of State Mike Pompeo’s expansion of the “Clean Network” initiative on August 5, it points toward an escalation of the administration’s efforts to disconnect from China, even cutting off exports to China.
WeChat is the product of Chinese innovation, but also of state-directed support and protection, thus there are concerns about its relationship with the Chinese Communist Party (CCP). WeChat is a super app, with payment and other functions, that has come to define and lead China’s walled digital economy, free from foreign competition. Yet, aside from its chat service, it has had limited success outside of China.
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