Donald Trump’s WeChat ban could harm revenue, US firms in Shanghai warn

US executive order has banned transactions related to the messaging app from mid-September, citing national security

American Chamber survey finds almost 90 per cent of companies subject to US law expect operations to be hit if the order applies in China

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Most respondents to the survey said they used WeChat primarily for communication with employees and for marketing. Photo: Reuters

Published: 8:22pm, 26 Aug 2020Updated: 8:22pm, 26 Aug 2020

US companies based in the financial hub of Shanghai said Washington’s planned ban on Chinese messaging app WeChat could badly hit their competitiveness and revenue, should it apply to US firms and citizens in China, a survey showed on Wednesday.

The American Chamber (AmCham) in Shanghai said 88 per cent of 142 respondents to a survey it conducted of firms subject to US jurisdiction this week expected negative impact on operations stemming from the loss of WeChat as a communication tool.

US President Donald Trump this month announced an executive order banning WeChat-related US transactions from mid-September, citing national security. His administration is yet to detail the types of transactions affected.

WeChat is operated by Tencent Holdings, China’s biggest social media and gaming firm. It has clocked a relatively small 19 million downloads in the United States, data from Sensor Tower shows, yet is a ubiquitous platform in China for services as varied as games and payments. It is also used to communicate with individuals and businesses outside China.

AmCham Shanghai said over a third of respondents to its survey said the WeChat ban could lead to a loss of global revenue, with nearly 5 per cent saying the hit could exceed 5 per cent.