Copyright
Getty Images
Tencent has overturned Donald Trump’s ban on its WeChat app, believing it will only affect its US operations.
The tech giant has an equivalent messaging platform in China called Weixin, which he hopes will not affect.
The bigger fallout could be Apple’s sales in China if its iPhones are not allowed to download Chinese messaging apps.
WeChat has more than one billion users worldwide, but says the US accounts for only 2% of its revenue.
Last Friday, US President Donald Trump ordered US companies to stop doing business with WeChat and TikTok within 45 days, with indications of concerns about national security.
The TikTok ban was expected, but still “shocked” the owners of the company ByteDance. WeChat, and its parent company Tencent, also found themselves trapped in the crossfire of escalating tensions between the US and China.
However, Tencent, the largest gaming company in the world, lowered Mr Trump’s executive order when it reported its second-quarter results on Wednesday. It saw a gain of 37%.
“If you look at the executive orders of May 2019 and then of course the executive order a few days ago, they very clearly specify that they cover US jurisdiction, and as a result, we see no impact on companies advertising on us. platform in China, “said James Mitchell, Tencent’s chief strategy officer.
Bigger bite
Business analysts are unclear about the full implications of the US ban on Tencent and ByteDance, and are waiting for more details.
There are fears that Apple could suffer if the ban extends to its operations in China. Experts say sales of his iPhone will be hit hard as Chinese consumers are not allowed to download messaging apps like Weixin on them.
The executive order stated that it “prohibits any transaction related to WeChat by any person, or with respect to any property, subject to the jurisdiction of the United States, with Tencent Holdings Ltd. (aka Téngxùn Kònggǔ Yǒuxiàn Gōngsī ), Shenzhen, China, as a subsidiary of that entity. “
Mr. Trump said the proliferation in the U.S. of mobile apps developed and owned by Chinese companies “threatens the national security, foreign policy and the US economy.”
According to calculations by Bloomberg, the Chinese market is worth about $ 44bn (£ 33.7bn) a year to Apple.
