As the tech sector reels from President Trump’s ban on TikTok and WeChat, via a set of executive orders signed Thursday night, the business world is grappling with the implications — especially for the latter app, which has become a pivotal communications pipeline between people and companies between the U.S. and China.
Trump’s move to sever the link has some companies scratching their heads about how deep the implications go. That’s largely due to the fact that his executive order manages to be decisively targeted and vaguely worded. Advertising is another vague area. Over the years, global brands interested in reaching the Chinese consumer have flocked to the platform, streaming in from tech to beauty, fashion and luxury. But American companies have only been able to place ads in WeChat since 2017. This looks like it’s ending now.
That may or may not be true right now, as it’s not directly outlined in the executive order. So a lot will hinge on how it’s interpreted and how it may be enforced. Either way, it doesn’t rule out the possibility of the White House pressuring executives to control their Chinese counterparts — which is the sort of move that has become a hallmark of the administration. But it would amount to a move that could upend the global operations of U.S. companies across numerous sectors.
He described it as “a worst-case scenario” in a research note following the news of the ban. Dai likens it to “a Huawei-like situation,” referring to the U.S.’ previous ban of Chinese telecom company Huawei Technologies Co., which has been blocked from buying American equipment.Consider that Trump singled out WeChat, with no mention of Tencent’s other businesses and investments in the U.S.
Brands and marketers big and small are already preparing back-up plans, if Microsoft doesn’t end up buying TikTok, as it’s now considering, which would force the app to leave the U.S.
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