U.S. finalizing ban for companies using Huawei, considers banning TikTok
Catch up on the top industries and stocks that were impacted, or were predicted to be impacted, by the comments, actions and policies of President Donald Trump and his administration with this weekly recap compiled by The Fly:
1. BAN ON COMPANIES USING HUAWEI, OTHERS: The Trump administration intends to finalize regulations soon that will prohibit the U.S. government from purchasing goods or services from any company that uses products from five Chinese companies, including Huawei, Hikvision, and Dahua, Reuters' David Shepardson reported, citing a U.S. official. The rule could have wide-ranging implications for companies that sell goods and services to the U.S. government, since they will now have to certify that they do not use goods from Dahu and Hikvision, even though both are among the top sellers of surveillance equipment and cameras globally, Shepardson said. The same rules would apply to two-way radios from Hytera Communications, as well as telecoms equipment company ZTE Corp. (ZTCOY), Shepardson noted.
Huawei suppliers include Micron Technology (MU) and Western Digital (WDC), while makers of optical components, including Acacia Communications (ACIA), NeoPhotonics (NPTN), Lumentum (LITE), and Finisar (IIVI), have previously reacted negatively to headlines regarding U.S. enforcement actions and allegations against China's Huawei.
2. U.S. LOOKING AT BANNING TIKTOK: Shares of Snap (SNAP) moved higher on Tuesday following reports that the U.S. is considering banning TikTok and other Chinese social media apps. Secretary of State Mike Pompeo told Fox News' Laura Ingraham that the U.S. is "looking at" banning social media apps, and that "we're taking this very seriously." Pompeo was asked by Ingraham whether the U.S. would consider a ban on the social media apps, particularly TikTok, and commented that "with respect to Chinese apps on people's cell phones, I can assure you the United States will get this one right too, Laura." Pompeo added that "I don't want to get out in front of the President, but it's something we're looking at." Pompeo further told Ingraham that TikTok should only be downloaded "if you want your private information in the hands of the Chinese Communist Party."
In a statement following Pompeo's comments, a TikTok spokesperson commented that, "TikTok is led by an American CEO, with hundreds of employees and key leaders across safety, security, product, and public policy here in the U.S. We have no higher priority than promoting a safe and secure app experience for our users. We have never provided user data to the Chinese government, nor would we do so if asked."
On Friday, CNN's Brian Fung reported that Amazon (AMZN) told its workers in an internal memo to delete TikTok from their phones or else they'd be cut off from the company's email "due to security risks." In response, TikTok said it did not hear from the e-commerce giant prior to the internal memo "and we still do not understand their concerns," Fung noted.
3. REPUBLICANS ALLEGE TWITTER BIASED AGAINST CONSERVATIVES: Republican House Representatives Jim Jordan and James Sensenbrenner sent a letter to Twitter arguing that the company was biased against conservatives and demanding information about its public reactions to two of Trump's posts on the platform, Reuters' Diane Bartz reported.
The lawmakers said in a letter to Twitter CEO Jack Dorsey that the platform's content moderation was not neutral and that it more often targeted conservatives, Bartz added. "Twitter's discrimination against conservative voices is extremely alarming. These actions give rise to concerns that the company is systematically engaged in the disparate treatment of political speech and is deceiving users of the platform by not uniformly applying its terms of service," they wrote in the letter.
4. FANNIE MAE, FREDDIE MAC SUIT: The U.S. Supreme Court has agreed to hear an appeal by President Trump's administration seeking to avoid a lawsuit by shareholders of mortgage finance companies Fannie Mae (FNMA) and Freddie Mac (FMCC) relating to the government rescue of the companies following the 2008 housing crisis, according to Reuters. The justices will review a 2019 ruling that shareholders in the two companies could pursue a challenge to the 2012 agreement between the Federal Housing Finance Agency and the Treasury Department, the publication noted. The deal eliminated dividend payouts to various shareholders and required the companies to pay the U.S. Treasury an amount equal to their quarterly net worth each quarter.
"Week in Review" is The Fly's weekly recap of its recurring series of "Trump Effect" exclusive stories.