Tencent Holding Ltd. has reassured American companies in two weeks after White House officials said that a ban on their WeChat app wouldn’t be as large as they expected.
WeChat’s owners jumped 4.2% in Hong Kong after familiarizing themselves with the matter, told that Trump’s government is secretly seeking to persuade U.S. firms such as Apple Inc. that it still has business in China with Tencent’s WeChat message app. Throughout the past few days, senior government officials have reached out to several businesses and realized that, according to the people, the effect of an all-encumbrance ban on the famous app would be disastrous for U.S. technology.
President Donald Trump has signed a pair of executive orders banning U.S. residents of the TikTok and WeChat apps citing the danger of national security to reveal the sensitive information of Americans. Company management tried to reassure investors earlier this month that President’s executive order signed on August 6 can be used for WeChat’s global operations only. The ban, which was enforced in the midst of White House attempts to cut down the growth of technology giants owned by China including Huawei Technologies Co. and ByteDance Ltd. owner of TikTok, had erased about $66 billion off Tencent value.
Intense lobbying by US business leaders such as Walmart, General Motors, Best Buy, and Target enhances the WeChat’s vital ability to attract Chinese consumers. Tencent’s revenue effect from President Donald Trump’s WeChat prohibition could be limited, as the government seems to limit the size of the order to protect US companies in China.
Following the decision to prohibit U.S. companies from dealing with the WeChat, Trump sparked a furor. Confusion reigned when investors caught up in Trump’s sweeping language-which bans the “transactions” of the Chinese company-leaving the door open for management to expand well beyond the US service. Apple’s shares fell into fears that the action may damage sales of iPhones in the larger U.S. market.
Senior officials of the administration are debating the nature of a ban imposed by Trump, one of the people said, and the President could potentially overrule whatever he wants.
