U.S.-listed Chinese stocks fall as Trump takes aim at WeChat, TikTok

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August 7, 2020

U.S.-listed shares of Chinese firms fell on Friday, a day after President Donald Trump unveiled bans on U.S. transactions with the China-based owners of messaging app WeChat and video-sharing app TikTok, escalating tensions between the two countries.

The executive orders will be effective in 45 days and come after the Trump administration said this week it was stepping up efforts to purge “untrusted” Chinese apps from U.S. digital networks.

Tencent Holdings Ltd owns the popular WeChat app, while ByteDance is the owner of TikTok.

Shares of other U.S.-listed Chinese companies backed by Tencent, including JD.com , Huya Inc and Nio Inc fell between 0.5% and 3.8%

“(There’s) some very specific companies and policies mentioned and that appears to be a proverbial line in the sand,” said Eric Freedman, chief investment officer at U.S. Bank Wealth Management in Minneapolis.

China’s foreign ministry took a hard stance against the executive orders, saying it would defend the interests of Chinese businesses and warned that the United States would have to “bear the consequences” of its action.

Tencent has invested in several Chinese, American and European companies, including Tesla Inc and “Call of Duty” creator Activision Blizzard Inc .

TIKTOK ON THE CLOCK

TikTok has come under fire from U.S. lawmakers over national security concerns surrounding data collection.

“Clearly, this is a major step up of tensions between the U.S. and China which started with Huawei a few years ago and has now engulfed consumer apps,” Wedbush analyst Dan Ives said.

The popular video app said it was “shocked” by the executive order and added that it would seek all courses of action to “ensure that the rule of law is not discarded.”

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Reuters on Sunday reported that Trump has given Microsoft Corp 45 days to complete the purchase of TikTok’s U.S. operations.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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U.S.-listed Chinese stocks fall as Trump takes aim at WeChat, TikTok

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