Tencent rejected Donald Trump’s ban on its WeChat app, believing it would only affect their operations in the US.
The tech giant runs an equivalent messaging platform in China called Weixin that it hopes will not be affected.
The bigger setback could be Apple̵7;s sales in China if its iPhones aren’t allowed to download Chinese messaging apps.
WeChat has over a billion users worldwide but says the US accounts for only 2% of revenue.
Last Friday, US President Donald Trump ordered US companies to stop doing business with both WeChat and TikTok within 45 days, citing national security concerns.
The TikTok ban was expected but is still “shocking” to owners of the company ByteDance. WeChat and its parent company Tencent were also caught up in the escalating tensions between the US and China.
However, Tencent, the world’s largest gaming company, downplayed Mr. Trump’s executive order when it reported second-quarter business results on Wednesday. It has seen profits increase 37%.
“If you look at the executive orders from May 2019 and it is clear that the executive order was a few days ago, they clearly specify that they include US jurisdiction and therefore, we do not see the any impact on companies advertising on our platform in China, “said James Mitchell, chief strategy officer at Tencent.
Business analysts are unclear about the full impact of the US ban on Tencent and ByteDance, and are awaiting more details.
There are concerns that Apple could be affected if the ban extends to its activities in China. Experts say their iPhone sales will be hit hard if Chinese consumers are not allowed to upload messaging apps like Weixin to them.
The executive order says it will prohibit “any transaction related to WeChat by any person or relating to any property, subject to U.S. jurisdiction, with Tencent Holdings Ltd. called Téngxàn Koonggǔ Yǒuxiàn Gōngsī), Shenzhen, China or any of its subsidiaries. “
Trump said that the US spread of mobile applications developed and owned by Chinese companies “threaten US national security, foreign policy and the economy of the United States”.
According to Bloomberg calculations, the Chinese market is worth about $ 44 billion (£ 33.7 billion) a year for Apple.