TikTok owner ByteDance challenges US executive order against it, as Trump administration targets WeChat in major trade war escalation
ByteDance, the China-based firm that owns TikTok, has vowed to sue the US government over an executive order launched against the company by president Donald Trump.
The move comes amidst escalating attacks on Chinese companies by Trump, who faces are-election contest later this year.
Trump also signed an executive order targeting WeChat owner Tencent, in both cases citing national security concerns.
The orders ban US companies from making deals with the two Chinese firms after a period of 45 days.
TikTok said it was “shocked” by the move, and promised to “pursue all remedies available” to “ensure the rule of law is not discarded”.
WeChat owner Tencent said it is “reviewing the executive order to get a full understanding”.
Trump has threatened to ban TikTok after 15 September unless its US operations are sold to a domestic company.
ByteDance and Microsoft have confirmed they are in talks over a potential deal, which Trump said he would support as long as the US government receives a “substantial portion” of the sale price.
The Trump administration alleges that TikTok passes sensitive data on US citizens to the Chinese government, something ByteDance denies.
ByteDance said it had been attempting to negotiate with the US government for nearly a year “in good faith”.
“What we encountered instead was that the administration paid no attention to facts, dictated terms of an agreement without going through standard legal processes, and tried to insert itself into negotiations between private businesses,” the company said in a statement.
The Trump administration has also targeted Chinese firms listed on US stock exchanges, saying they should be delisted unless they provide regulators with access to their audited accounts.
On Friday China’s foreign ministry accused the US of using national security as a pretext to exert dominance.
The two executive orders allege that ByteDance and Tencent “threaten the national security, foreign policy, and economy of the United States”.
They are issued under the authority of the National Emergencies Act and the International Emergency Economic Powers Act.
ByteDance said the order against it “risks undermining global businesses’ trust in the United States’ commitment to the rule of law”.
The company added that the order sets “a dangerous precedent for the concept of free expression and open markets”.
“We will pursue all remedies available to us in order to ensure that the rule of law is not discarded and that our company and our users are treated fairly – if not by the administration, then by the US courts,” ByteDance said.
The order against WeChat is a substantial escalation of Trump’s actions against Chinese companies.
The app, which has more than 1 billion users, combines social networking elements with other features, including business communications and payments.
It is the dominant form of online communications in China, where email is less commonly used than in Western countries.
The app is also a primary means for individuals and organisations in the West to communicate with contacts in China.
A ban on WeChat in the US would therefore be likely to have a major impact on cross-border communications.
“Considering the scale of usage of both apps in the US and globally, these executive orders will undoubtedly cause substantial impacts for both users, communities and in some instances, businesses which rely on the apps to market goods and services, or promote their brands,” said Mark Tibbs, cyber intelligence director at law firm Mishcon de Reya.
Tibbs said China may respond by taking action to restrict trade with US technology firms.
Industry-watchers have speculated that the US may use the executive orders to ban WeChat and TikTok from Apple’s App Store and Google Play worldwide, bringing into question the ability of Tencent and ByteDance to sustain their international businesses.
The orders are part of a broader trade-related conflict between the US and China that has seen the US take a series of actions against Chinese firms such as Huawei and ZTE.
Last week US Secretary of State Mike Pompeo urged American companies to remove “untrusted” Chinese-owned technology from their networks.
The administration’s push for a so-called “clean network” was called an act of “madness” by Chinese state-backed media.
In an editorial China’s Global Times said the executive order against TikTok was an “atrocity against internet freedom worldwide”.