Trump administration moves ahead with bans on WeChat, TikTok

For weeks, Charlie Gu has been preparing for the door to close on WeChat.

A San Francisco marketing agency owner whose business helps American brands reach Chinese consumers, Gu uses the mobile communications app extensively in his personal and professional lives. Since the Trump administration issued executive orders banning WeChat and TikTok, another popular Chinese-owned mobile app, on Aug. 6, Gu has been answering clients’ questions about what it means for them.

Still, when the U.S. Commerce Department announced Friday that the WeChat ban would take effect Sunday night, it caught him off guard.

“A lot of people are in shock that it’s actually happening,” he said. “I have to say, this is quite a shock.”

If the news was hard to see coming, it may be because the government’s campaign against TikTok and WeChat has been unpredictable from the start, full of surprise left turns — such as Oracle swooping in under Microsoft’s nose to become the leading contender to take over TikTok’s U.S. operations — and false starts, including Trump’s promise to extract a payment to the Treasury from any transaction resulting from the orders, later abandoned.

It’s still far from clear how the saga will turn out, with a U.S. district judge indicating she may issue an injunction to prevent the WeChat order from kicking in, at least temporarily, and the success of Oracle’s bid not guaranteed.

Announcing the restrictions Friday, Commerce Secretary Wilbur Ross said in a statement they “prove once again that President Trump will do everything in his power to guarantee our national security and protect Americans from the threats of the Chinese Communist Party.”

Under the Commerce Department’s guidance, American companies, including Apple and Google, are being instructed to remove WeChat from their mobile app stores. The department also said WeChat’s ability to transfer funds in the U.S. would be curtailed.

After 11:59 Sunday night, TikTok users in the U.S. will not be able to access updates to the TikTok app, which could cause a gradual degradation of the app’s services, Commerce Department officials said. TikTok confirmed the order would block new app downloads.

The Trump administration is targeting popular apps owned by China-based tech companies, raising national security concerns about whether these apps could pass on information about U.S. users to the Chinese government. The administration has given TikTok’s parent company, ByteDance, a deadline of Nov. 12 to divest TikTok’s U.S. operations or face a full ban in the U.S.

In a briefing call with reporters early Friday, senior Commerce Department officials, speaking on background, declined to say how the new restrictions would be enforced, and they acknowledged the practical limitations of a ban and the potential backlash the administration could face in targeting an app that many Chinese Americans use to communicate with friends and relatives in China and elsewhere.

“We expect that individual users will probably find ways to use these applications. Stopping every person from using these, WeChat or TikTok in the United States, is not our intent,” a senior official said, noting that the aim of the prohibitions would be to reduce the availability of data from Americans and the threat to national security.

“We’re not going to haul some person using WeChat to communicate with folks overseas before a federal judge,” a senior official said.

ByteDance is working on gaining approval from the U.S. and Chinese governments of a deal whereby Oracle would be named its trusted technology partner, maintaining and operating TikTok in the United States. TikTok said in a statement that its proposal would also include “third-party audits, verification of code security and U.S. government oversight of U.S. data security.”

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Commerce Department officials on the briefing call declined to comment on the state of those talks. The Commerce and Treasury departments are working together to review the process. “We took pains to not do anything in this order that might disrupt the ongoing negotiations with the parties and the president’s deliberations whether or not to accept the arrangement that’s being developed,” a Commerce official said.

At a news conference Friday, Trump said a deal between ByteDance and Oracle “could go very quickly, it could go very, very fast.” He added: “We have some great options and maybe we can keep a lot of people happy, but have the security we need. We’re not going to do anything to jeopardize security.”

The administration’s decision to hold off on imposing most of the restrictions for TikTok until Nov. 12 means those actions would come after the presidential election. Commerce officials denied that the delay was politically motivated, saying the deadline was timed to a 90-day period from Trump’s executive order on the matter issued in August.

The deal is under review by the Committee on Foreign Investment in the United States, a group of Senate-confirmed officials who meet to examine the national security implications of certain investments by foreign entities. CFIUS will make a recommendation to Trump.

Typically, a deal in which an American company would not have 100% ownership of TikTok would give CFIUS pause, given its security concerns about the personal information of U.S. citizens, said Nicole Lamb-Hale, who represented the Commerce Department on CFIUS and is now a managing director at Kroll, a New York-based risk consulting firm.

Lamb-Hale said it’s important to the credibility of CFIUS that these actions were taken due to national security threats and not as a political tool in a U.S.-China trade war.

“The CFIUS process — it’s to be used to protect national security only,” she said. “It shouldn’t be stretched to cover other kinds of goals or interests that the U.S. may have from a trade standpoint.”

Six U.S. senators, including Sen. Marco Rubio (R-Fla.), cast doubt on a version of the proposal in a letter this week to Trump.

“As reported, the proposed partnership agreement between Oracle and TikTok leaves significant unresolved national security issues,” the letter said.

TikTok has also sued the Trump administration over the executive order signed Aug. 6 and said Friday that it disagrees with the Commerce Department’s decision.

Trump signed the executive order under the International Emergency Economic Powers Act, which gives him the authority to regulate international commerce to address unusual or extraordinary threats.

“We will continue to challenge the unjust executive order, which was enacted without due process and threatens to deprive the American people and small businesses across the U.S. of a significant platform for both a voice and livelihoods,” TikTok said in a statement.

On Monday, the Department of Justice said in court documents that the order would not prevent TikTok employees from receiving payments and benefits.

A coalition of WeChat users filed a lawsuit in the Northern District of California on Aug. 21 seeking to block Trump’s executive order on WeChat from taking effect. The complaint alleged the order violates constitutional rights to free speech.

In a hearing on that lawsuit Thursday, U.S. Judge Laurel Beeler said she would be willing to grant a preliminary injunction, citing the hazy language of the order and its potential effects on users who rely on WeChat.

“I will say I am sympathetic to the anxiety that it creates for the people who are affected, and therein lies the vagueness concern,” she said at the hearing. “This is the only mode of communication for many. I know that. We all know that.”

At an emergency hearing Friday, Beeler said she had already begun writing up an order granting a preliminary injunction. But when the Commerce Department issued its instructions, it changed the “fact landscape” and she would need to hear further arguments to make her decision, she said. She scheduled a follow-up hearing for Saturday afternoon.

In a statement, WeChat parent company Tencent said it was reviewing Friday’s announcement.

“The restrictions announced today are unfortunate, but given our desire to provide ongoing services to our users in the U.S. — for whom WeChat is an important communication tool — we will continue to discuss with the government and other stakeholders in the U.S. ways to achieve a long-term solution,” the company said.

With TikTok’s future uncertain, competitors have ramped up their efforts to secure content from the app’s most popular creators. Instagram last month launched in the U.S. its short-form video feature Reels, while YouTube this week offered in India an experience called Shorts. Both allow users to upload and record 15-second videos.

Three TikTok creators, including USC student Cosette Rinab, on Friday filed a lawsuit in federal court in Philadelphia against Trump, Ross and the Commerce Department. The creators said the order signed by Trump on Aug. 6 violates their constitutional rights, including the 1st Amendment.

Some analysts believe a deal with TikTok would benefit Oracle in its competition against Microsoft in the cloud computing arena. TikTok users are cranking out lots of videos, requiring a stable platform, and that’s where Oracle comes in, said Ray Wang, founder of Constellation Research Inc. in the Silicon Valley.

“They want to go after as many of these workloads as there are, because that allows you to keep building out your cloud, to get your cloud bigger and bigger,” Wang said.

Oracle already has data that, combined with TikTok’s, could help it build an advertising network, Wang said. In 2014, Oracle acquired Cupertino-based BlueKai, which helped companies personalize their mobile marketing campaigns.

Oracle has ties to the Trump administration. The company’s co-founder Larry Ellison hosted a Trump campaign fundraiser and is a supporter of the president. Oracle Chief Executive Safra Catz also served on Trump’s transition team.