On the heels of US Secretary of State Mike Pompeo floating the Trump administration’s scrutiny on TikTok last Monday, White House trade adviser Peter Navarro said on July 12 that he expected President Trump to take actions against TikTok and WeChat in an interview with Fox News. Also, Navarro would not rule out the possibility of banning the two social media applications in the States. Any actions, however, have not been specified by the administration and are claimed to be part of a broader effort to protect American citizens’ data privacy.
While TikTok and WeChat are owned by the Chinese tech giants, ByteDance and Tencent, respectively, they engage distinct user demographics in the US. Tiktok has experienced huge engagement among local US millennials and Gen-Z, while WeChat is primarily used by overseas Chinese and global businesses with a footprint in the Chinese market.
In light of the recent political tensions, TikTok is now in the position of dealing with allegations of disclosing user data to China. Though the company has appointed an American CEO and has been working to distance the global operations from its Chinese roots, Navarro’s accusation of its American CEO as an “American puppet” has not helped TikTok’s case.
A ban on TikTok would kill the application’s meteoric rise in the US, while the current friction already leaves marketers and advertisers having to rethink their investment in the newcomer. A ban on WeChat would be less of a direct hit, as the ecosystem’s wide-ranging functions are mostly limited to messaging outside of China and payment in certain travel destinations.
While in China the firewall restricting US tech players including Facebook and Google has become standard, up until now, the reverse has never been proposed or even imagined. If the Trump administration makes real moves to block Chinese platforms, a full fledged digital war could ignite between China and the US, with untold implications for all industries, including luxury. Under this reality, US netizens would soon find themselves needing Virtual Private Networks (VPNs) to access China-based apps.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.