Tencent is one of the largest tech companies in the world and a powerhouse in China. It has very close ties to the ruling Chinese Communist Party, which helped fund the creation of the WeChat app.
Tencent is bigger than TikTok owner ByteDance, with vast ownership stakes in video game studios, music companies and social media apps. It owns portions of Snap, Blizzard, Spotify, among others, making it deeply embedded in the global tech industry.
President Trump's order made those ownership connections much more dangerous, even if they fall outside the narrow legal consequences of the order.
As Tencent responds and its business partners are forced to choose sides, the consequences could be far broader than the White House realizes — and far more damaging to the average consumer.
The executive order is intended to target WeChat specifically. However, we won’t know until September 20 which “transactions” are actually prohibited — for instance, whether it applies to money sent through WeChat or whether it will apply to money transferred between Tencent subsidiaries.
WeChat is the dominant chat app in China and a ubiquitous tool for payments, shopping, and business transactions. Many companies large and small are run almost entirely through it; its immense footprint involves an estimated 1 billion users in China. Estimated usage in the U.S. is 1.5 million.
WeChat is deeply embedded in China’s various systems of censorship and surveillance, and there are real security concerns for the minority of users outside China. Within China, there is no expectation of privacy nor does Tencent make any persuasive pretense of providing privacy.
President Trump's order invokes the International Emergency Economic Powers Act to prohibit “any transaction that is related to WeChat by any person, or with respect to any property, subject to the jurisdiction of the United States, with Tencent Holdings Ltd, or any subsidiary of that entity, as identified by the Secretary of Commerce.”
Any business with a Tencent ownership stake is potentially implicated since an abrupt departure of Tencent from the market could throw their financial situations into chaos in the midst of a global economic crisis. It’s hard to say precisely what the impact will be, but the sheer scope of the company’s investments shows how ugly things could get.