Americans will no longer be able to download TikTok and WeChat from Sunday when the Trump administration banned them from US app stores.
The Department of Commerce issued an order on Friday preventing people in the US from downloading the Chinese video-sharing app and messaging app after this weekend.
People who already have the apps on their phones can still use TikTok but not download updates while WeChat will effectively shut down starting Sunday.
TikTok, the popular video app, has a longer grace period. It won't fully close until November 12 – after the general election – as negotiations continue with American companies interested in buying it. Oracle and Walmart are both in talks.
An official told Reuters that US users of TikTok would not see a "big difference" in the app's performance until November 12th.
Trade Secretary Wilbur Ross discussed the changes users would see in an interview with Fox Business' Maria Bartiromo on Friday morning.
'WeChat is essentially a wire transfer and payment processing mechanism. For all practical purposes it will be closed in the US, but only from midnight Monday in the US, ”he said.
As for TikTok, the only real change as of Sunday night will be not having access to upgraded apps, updated apps, updated apps, or maintenance. So if this continues over a long period of time, there could be a gradual deterioration in services. The basic TikTok will remain in place through November 12, however, ”Ross noted.
But he said the deadline could be postponed if there is a sales contract – otherwise the app will be locked after the election.
"If there isn't an old-order deal by November 12th, TikTok would also be closed for all practical purposes," Ross said.
President Trump's administration bans downloading TikTok and WeChat, two Chinese apps
Commerce Secretary Wilbur Ross said WeChat will close after this weekend, but TikTok can be used but not updated until November 12th
ByteDance, the Chinese company that owns TikTok, has spoken with Oracle Corp and others to create a new company, TikTok Global, to help address US concerns about the security of its users' data.
The markets did not react very much to the news of the ban. Both Oracle and Walmart stocks fell slightly, but Wall Street has otherwise continued to operate as usual.
President Donald Trump must approve every sale.
The Department of Commerce order "deplatforms" the two apps in the US and prevents Apple Inc's App Store, Alphabet Inc's Google Play, and others from offering the apps on any platform "accessible from the US."
"Today's actions prove once again that President Trump will do everything in his power to ensure our national security and protect Americans from the threats posed by the Chinese Communist Party," Ross said in a statement.
Trump said Wednesday that he was unwilling to sign a contract for Oracle to purchase TikTok from its Chinese parent company. He cited national security concerns and wanted to make sure the US government received their cut.
“In terms of national security, it has to be 100 percent. No, I am not ready to unsubscribe anything. I have to see the deal, ”said Trump. "You will get in touch with me in the morning and I will let you know."
He also said he was surprised to learn that the US cannot cut the TikTok deal and that he will get the government to look into it.
"Amazingly, I think you are not allowed to do that," he said at his press conference when asked about payments to the finance department for the sale, an idea he had pushed. "There is no way to do this – there is no legal way to do it."
Trump was briefed on the matter by tax officials on Thursday morning.
“You are ready to make a large payment to the government and we are not allowed to take your money? When does this happen? How stupid can we be We are currently investigating. I said no, I want a lot of that money to go to the United States government because we made it happen, ”he complained.
“The lawyers come back to me and say there is no way to do that. You know why? & # 39; he said. “Because nobody ever said that we would approve the deal, but we want a lot of money to go to the government. Because by approving the business, we make the business valuable. They had never heard of it before. Okay? Can you believe that? & # 39;
Trump said he also didn't like that the U.S. purchasing company held a minority stake in the Chinese company.
"I do not like it. I haven't been told that yet. This was reported but not told to me. It could be an accurate reporting for a change. If that's the case, I won't be happy with it. Say ByteDance is China and I think it is, ”he said.
In the meantime, Oracle and Walmart could work together to acquire a significant stake in the company, the Wall Street Journal reported.
This partnership, combined with existing American investors, could put the majority in the hands of the US, which would alleviate some of Trump's concerns.
Walmart, who worked with Microsoft on a previous deal to buy the popular app, said in a statement on Sunday that it "continues to have an interest in a TikTok investment and talks with ByteDance leadership and other interested parties continues ".
Trump said Thursday he spoke to both WalMart and Oracle about the matter.
“We're going to make a decision, but not much has changed. We'll make a decision soon, ”he said.
The fate of TikTok ownership remains in the limelight with Oracle and WalMart interested
However, the Chinese authorities have announced they will not allow ByteDance to sell the algorithms used by TikTok, which are believed to be a large part of the value for the app.
While a deal is being negotiated, Chinese President Xi Jinping said on Thursday, "Innovation is the most important quality of corporate governance, and we must also overcome obstacles to do so in the future."
"The key technology needs to be held firmly in our hands," he added, according to China's official Xinhua news agency.
Friday's order does not prohibit US companies from doing business with WeChat outside of the US. This is welcome news for US firms like Walmart and Starbucks who are using WeChat's embedded mini-app programs to facilitate transactions and engage consumers in China.
& # 39; WeChat is mainly used by American companies as a payment mechanism in China and elsewhere. It won't bother at all, ”Ross told Fox Business.
The order does not exclude transactions with other WeChat-owned Tencent Holdings companies, including online gaming activities, and does not prohibit Apple, Google or others from offering TikTok or WeChat apps outside of the US.
The bans are in response to two executive orders issued by Trump on Aug. 6 that gave the trading department 45 days to determine which transactions to block for apps he viewed as a national security threat. This period ends on Sunday.
Commerce Department officials said they made the extraordinary move because of the risks posed by the apps' data collection. China and the corporations have denied that US user data is being collected for espionage.
The Trump administration has stepped up efforts to remove “untrustworthy” Chinese apps from digital networks in the US, calling TikTok and WeChat “significant threats”.
The Trump administration has stepped up efforts to remove "untrustworthy" Chinese apps from digital networks in the US, calling TikTok and WeChat "significant threats".
TikTok has 100 million users in the US and WeChat has 19 million users in the US.
TikTok has 100 million users in the US and is particularly popular with younger Americans.
WeChat had an average of 19 million daily active users in the US, analytics firm Apptopia said in early August. It is popular with Chinese students, ex-pats, and some Americans who have personal or business connections in China.
WeChat is an all-in-one mobile app that combines similar services such as Facebook, WhatsApp, Instagram and Venmo. The app is an essential part of everyday life for many in China and has more than 1 billion users.
Commerce is excluding additional technical transactions with WeChat starting Sunday, which will significantly affect the usability and functionality of the app in the United States.
The order prohibits the hosting of data in the United States for WeChat, content delivery services, and networks that can improve functionality and Internet transit or peering service.
"What will happen immediately is that users will experience a delay or a lack of functionality," a senior Commerce official said of WeChat Users. "It can still be used, but it won't be as functional as it was." There could also be sporadic failures, the official said.
Commerce will lock the same technical transactions on TikTok, but these won't take effect until November 12th to give the company additional time to review if ByteDance can get a deal on its US operations.
The trade will not penalize people using TikTok or WeChat in the US. The order does not block data storage in the USA for WeChat or TikTok.
Some Americans may find workarounds. There's nothing stopping an American from traveling to a foreign country and either downloading an app or possibly using a virtual private network and desktop client, officials admitted.