NEW YORK - As the Trump administration is threatening to ban popular apps including TikTok and WeChat, "the United States may lose in Trump's war," warned an expert.
Wei Shangjin, professor of finance and economics at Columbia University's Graduate School of Business and School of International and Public Affairs, said forcing TikTok to be sold cheaply to a "very American" buyer will endanger many US firms in the Chinese market, according to an opinion published by Project Syndicate on Thursday.
"If China were to mimic Trump's gambit -- alleging, without providing evidence, that some U.S. multinationals are potential national-security threats -- it could force them to sell their operations to 'very Chinese' buyers. Although the Chinese government has not yet done so, the risk has become higher now," said Wei, who served as chief economist of Asian Development Bank during 2014-2016.
US President Donald Trump on Thursday issued an executive order banning any US transactions with Chinese tech firm ByteDance, owner of TikTok, starting in 45 days.
TikTok has been downloaded over 175 million times in the United States and over 1 billion times globally, according to the executive order, which claims that the app automatically captures "vast swaths of information" from its users, posing risks to U.S. national security.
A similar executive order has also been issued for WeChat, a messaging and social media app owned by Chinese tech giant Tencent.
Although Trump's actions could yield a short-term gain for the United States, they have introduced severe potential risks to US interests, not to mention international and domestic rules of commerce, Wei said.
"After all, what would happen to business confidence if governments assumed that they could extort private enterprises at will?" Wei added.
Trump is essentially doing what the United States has long accused China of doing: disrespecting private property, presuming guilt without evidence, eroding foreign firms' legitimate rights without compensation, and using arbitrary, opaque rules to block them from operating in the country, according to Wei.
"There is still time for the Trump administration to change course and avoid damaging US interests. But the clock is running -- tick tock," Wei said.