China "firmly opposes" the executive orders President Donald Trump signed Thursday banning U.S. transactions with the parent companies of TikTok and WeChat beginning Sept. 20. The U.S., "under the pretext of national security, has time and again used state power to wantonly oppress non-U.S. companies, nothing short of bullying," said a Foreign Affairs Ministry spokesperson Friday. "All this will boomerang." The “spread” of mobile apps developed and owned by companies in China “continues to threaten the national security, foreign policy, and economy of the United States,” Trump wrote House Speaker Nancy Pelosi, D-Calif., and Senate Finance Chairman Chuck Grassley, R-Iowa, Thursday in separate letters addressing the alleged WeChat and TikTok threats. Both automatically capture “vast swaths of information from its users,” giving the “Chinese Communist Party access to Americans’ personal and proprietary information,” said Trump. TikTok said it was “shocked” by the EO, which it said was issued “without any due process.” The company said it tried to negotiate with the U.S. government for about a year to address U.S. concerns. “What we encountered instead was that the Administration paid no attention to facts, dictated terms of an agreement without going through standard legal processes, and tried to insert itself into negotiations between private businesses,” it said. TikTok also said it has never shared user data with the Chinese government. “We will pursue all remedies available to us in order to ensure that the rule of law is not discarded and that our company and our users are treated fairly -- if not by the Administration, then by the US courts,” the company said. A spokesperson for WeChat parent Tencent said the company is “reviewing the executive order to get a full understanding.”

The Office of Information and Regulatory Affairs began an interagency review of a Commerce Department Bureau of Industry and Security pre-rule to pinpoint potential controls for foundational technologies. OIRA received the rule Monday. The rule faced months of delays (see 2007230044).

The Trump administration, without evidence, “stretched the concept of national security and abused its state power to bring down certain non-U.S. enterprises,” said a Chinese Foreign Affairs Ministry spokesperson Tuesday. It was in reaction to President Donald Trump’s threats Monday to put TikTok out of business in the U.S. if it’s not sold to an American company by Sept. 15. The threats are “a blatant act of bullying,” which China “firmly opposes,” said the spokesperson. If Trump follows through, “then any country can take similar measures against any U.S. company on the grounds of national security,” he said: “The U.S. must not open Pandora's box, or it will suffer the consequences.” Trump told reporters Tuesday he had a “great conversation” with Microsoft CEO Satya Nadella (see 2008030027), in which he told Nadella that China can’t control such a large company for “security reasons.” He suggested Microsoft buy the entire company, not just 30%, because the brand is “hot.” U.S. Treasury deserves a “substantial" cut of the money exchanged in any deal because the federal government is allowing the negotiations to continue, said Trump. Banning TikTok would be unfair to users, the Open Markets Institute said in a statement Tuesday, but it supports the sale to a U.S.-owned company.

Trump administration threats to act against Chinese software companies run “counter” to World Trade Organization “principles of openness, fairness, transparency and non-discrimination,” said a Chinese Foreign Affairs Ministry spokesperson Monday. “China firmly opposes that.” He urged the U.S. to “stop politicizing economic and trade issues" and practicing "discriminatory" policies "in the name of national security.” The “countless” Chinese software companies doing business in the U.S. are “feeding data directly” to China’s “national security apparatus,” Secretary of State Mike Pompeo told Fox News Sunday: President Donald Trump “will take action in the coming days with respect to a broad array of national security risks that are presented by software connected to the Chinese Communist Party.” TikTok is being eyed by the administration (see 2008030027).

House Commerce Committee Republicans on Monday requested a classified State Department briefing on TikTok, days after President Donald Trump threatened to ban the Chinese social media platform from the U.S. Microsoft is continuing talks to buy TikTok, after CEO Satya Nadella discussed it with Trump, it said Sunday: “Microsoft fully appreciates the importance of addressing the President’s concerns." It's committed to acquiring TikTok "subject to" a complete review, it said. House Commerce Committee ranking member Greg Walden, Ore.; House Minority Whip Steve Scalise, La.; and House Consumer Protection Subcommittee ranking member Cathy McMorris Rodgers, Wash., raised concerns about the video app and alleged ties to a Chinese company doing secret face recognition and data harvesting. Walden and Rodgers cited previous complaints about TikTok on children’s privacy, corporate governance and COVID-19. Banning TikTok would threaten U.S. jobs and the livelihood of American content creators reliant on the app, Information Technology and Innovation Foundation Vice President Daniel Castro said: “In a week where many policymakers have called for more competition in the tech sector, undermining one of the fastest-growing social media platforms would be a step in the wrong direction.” ACT|The App Association said it's encouraged by ongoing negotiations for Microsoft to buy TikTok: “While this is an ongoing negotiation with no guaranteed outcome, we strongly urge policymakers to avoid a government intervention in banning TikTok that could result in an unprecedented geofencing of access to an online service used by 50 million Americans a day and create significant disruption to the app economy.” The State Department didn’t comment. The Microsoft blog suggests Trump “at least tentatively blessed the deal,” said Cowen analyst Paul Gallant. The deal could strengthen Facebook’s argument against antitrust scrutiny, and it might invite more attention on Microsoft from policymakers in Washington, he said.

New EU restrictions against China for its actions in Hong Kong include export controls on “sensitive” equipment and technologies for end-use in Hong Kong. The EU said it will more strictly scrutinize and limit exports of “specific” equipment and technologies for use in Hong Kong. Restrictions will specifically apply to items suspected to be used for “internal repression, the interception of internal communications or cybersurveillance.” China called the restrictions a violation of international norms. “Since the EU claims to have interests and concerns in Hong Kong … it should work in this direction with practical actions, rather than unilaterally introducing some so-called countermeasures to affect Hong Kong's prosperity and stability,” a Foreign Affairs Ministry spokesperson said Wednesday, according to an unofficial translation of a transcript of a news conference. The country's embassy in Washington didn't comment Thursday.

American personnel “vacated” the U.S. consulate in Chengdu, China, and the compound was closed Monday, confirmed a Foreign Affairs Ministry spokesperson. China ordered it closed in retaliation for the Trump administration’s shutdown of the Chinese consulate in Houston on espionage and intellectual property theft allegations. China urges the U.S. to “create necessary conditions for bringing the bilateral relationship back on track,” said the spokesperson.

It’s difficult to judge the likelihood of success of House legislation that would direct the Office of the Trade Representative to extend Trade Act Section 301 tariffs exclusions automatically for at least a year (see 2007170050), Nicole Bivens Collinson, the Sandler Travis president-international trade and government relations, told a Sports & Fitness Industry Association webinar Thursday. Collinson isn’t sure if the bill “has legs or not,” she said. “That it is bipartisan is helpful.” She thinks the legislation could clear the House, “but I don’t know that the Senate would be willing to bring it up,” because Senate Republicans would view it as “usurping” President Donald Trump’s tariff “authority,” she said. It’s also highly unlikely Trump would sign it into law, she said.

The top Republican on the House Ways and Means Committee supports extending Trade Act Section 301 tariff exclusions on Chinese imports automatically instead of through burdensome notice and comment proceedings, he told reporters Wednesday. The Trump administration should alleviate “the energy and effort that businesses have to undertake to extend these exclusions right now when they frankly have bigger fish to fry,” said Rep. Kevin Brady, R-Texas. He said he expressed his views to U.S. Trade Representative Robert Lighthizer and Commerce Secretary Wilbur Ross. Brady supports bipartisan legislation sponsored by fellow Ways and Means member Rep. Jackie Walorski, R-Ind., and House Agriculture Committee Chairman Collin Peterson, D-Minn., that would direct USTR to extend expiring exclusions for at least a year, but would give the agency some discretion when it disagrees (see 2007170050). U.S. businesses should be “focused on surviving” the COVID-19 pandemic and keeping people employed instead of scrambling to find non-Chinese sourcing or arguing for an exclusion extension, Brady said. USTR and Commerce didn’t comment Thursday.

A “key thing” about the Trade Act Section 301 tariff exclusions on Chinese goods that have been granted or extended is that most end Dec. 31, Nicole Bivens Collinson, Sandler Travis president-international trade and government relations, told a Sports & Fitness Industry Association webinar Thursday. If President Donald Trump is reelected, she believes his administration “will view that as a mandate” for eradicating tariff exclusions permanently. As an importer, “I would be looking at January as having tariffs in place without any exclusions,” she said. If U.S.-China relations further deteriorate, Collinson fears the 7.5% List 4A tariffs will increase to 25%, she said. “We also have a List 4B that has no tariffs on them right now. That could change as well." The Office of the U.S. Trade Representative didn’t comment.