President Trump’s threat to ban WeChat in the U.S. has shaken the stock markets and is now roiling the corporate world.
Shares of Tencent Holdings, its parent company, fell as much as 10 percent on Friday (Aug. 7) hours after the president issued his ban, which would take effect in 45 days. The president included ByteDance’s TikTok in his planned ban.
In the wake of Trump's executive order, analysts drew up estimates for how the move would pummel Apple. A prominent analyst said the ban could slash iPhone shipments.
Global shipments of the iPhone could drop by 25 to 30 percent if Trump carries out his threat, said KGI Securities Analyst Ming-Chi Kuo. “Because WeChat has become a daily necessity in China, integrating functions such as messaging, payment, eCommerce, social networking, news reading and productivity ... if this is the case, we believe that Apple’s hardware product shipments in the Chinese market will decline significantly."
Big business is fighting such a ban. The Wall Street Journal reports that in a call with White House officials on Tuesday (Aug. 11), more than a dozen major corporations raised fears over the implementation of such a ban. These included Apple, Ford Motor Co., Walmart, Walt Disney Co., Procter & Gamble Co., Intel Corp., MetLife and United Parcel Service, along with finance giants Morgan Stanley and Goldman Sachs Group.
“For those who don’t live in China, they don’t understand how vast the implications are if American companies aren’t allowed to use it,” said Craig Allen, president of the U.S.-China Business Council. “They are going to be held at a severe disadvantage to every competitor."
The Journal said the companies involved declined to comment or didn’t get back to the newspaper.
For companies doing business in China, WeChat serves as a key way to connect with consumers. Globally, it is used by more than 1.2 billion people.
A White House spokesman told the Journal that the administration “is committed to protecting the American people from all cyber-related threats to critical infrastructure, public health and safety, and our economic and national security.”