"Expressing 'Business Impossible in China'"
[Asia Economy Reporter Kwon Jae-hee] U.S. multinational corporations have expressed concerns that the Trump administration's regulations on Chinese applications such as TikTok and WeChat could backfire. President Trump has not ceased his offensive, stating that TikTok must "provide complete security."
According to the Wall Street Journal (WSJ) on the 13th (local time), representatives from 12 U.S. multinational companies including Walmart, Ford, Walt Disney, and Goldman Sachs lamented during a conference call with the White House that banning TikTok and WeChat would make business operations in China impossible.
Earlier, President Trump signed an executive order banning all transactions with Tencent, the provider of WeChat. The implementation deadline is 45 days, and it applies to both individuals and companies under U.S. jurisdiction.
Craig Allen, chairman of the U.S.-China Business Council (USCBC), pointed out, "Those not residing in China cannot understand what banning WeChat for U.S. companies means," adding, "U.S. companies will suffer tremendous disadvantages compared to foreign competitors in the Chinese market."
WeChat is an "all-in-one app" in China that provides every service from messaging to food ordering, hotel reservations, and marriage registration. In China, daily life is nearly impossible without WeChat.
The company expected to be hit the hardest is Apple. If Apple removes WeChat from its App Store worldwide, iPhone sales could also be affected. Guo Mingchi, an Apple expert and analyst at TF International Securities, analyzed, "If the U.S. government blacklists WeChat, the iPhone among Apple products will suffer the most significant impact," adding, "Annual iPhone sales could decrease by 25 to 30%."
In an online survey conducted in China, over 90% of respondents said they would switch to another smartphone if they could not use WeChat on their iPhones.
As tensions between the U.S. and China escalate, more companies are reportedly facing difficulties in management. According to a survey by the U.S.-China Economic Council, 86% of its approximately 100 member companies reported that tensions between the two countries have caused decreased sales and other adverse effects in China. One multinational company stated, "We lost bids in China simply because we are an American company."
On the same day, President Trump emphasized at a White House press conference regarding the sale of TikTok, "It must be proven to be completely safe." TikTok is currently negotiating with Microsoft (MS) for the sale of its U.S. business, and President Trump has set a negotiation deadline of September 15.
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