The messenger app WeChat and short-video app TikTok are seen near China and U.S. flags in this illustration picture taken August 7, 2020.
Florence Lo | Reuters
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The Trump administration just threatened to slap a new ban on two widely popular Chinese-owned apps in the U.S., leaving a slew of companies vulnerable to retaliation measures from China as the nation has a long history of punching back.
The Commerce Department announced Friday it will prohibit new downloads and block some transactions over WeChat and TikTok starting Sunday, amid Oracle and Walmart's attempt to take a stake in TikTok's U.S. business. If the U.S. follows through on this threat, it could not only strike a harsh blow on U.S. firms with revenue exposure to these apps, but also put a variety of tech companies in a weak position depending on China's counter action.
"The broader worry is that if a deal is not reached over the next 48 hours with approval by the Chinese government around source code access and majority ownership, this shutdown move could be a Fort Sumter moment in the US/China cold tech war tensions with retaliation on the horizon," Wedbush analyst Dan Ives said in a note on Friday.
Here is a breakdown of the most impacted U.S. stocks under different scenarios.