The executive order of Trump against TikTok and WeChat is due to come into force within 45 days.
President Trump on Thursday signed an executive order banning social media uses of TikTok and WeChat.
- The Trump administration fears that the Chinese government could very easily access user data from American TikTok users.
- Last Friday, Seattle-based Microsoft announced it was exploring the TikTok acquisition.
- The agreement will allow Microsoft to operate TikTok in the United States, Canada, Australia and New Zealand.
The sanctions, which take effect in 45 days, could force TikTok’s Chinese parent company ByteDance to sell to an American company, or face statewide suspension.
The move comes less than a week after Microsoft CEO Satya Nadella talked to Trump about getting the app.
Restrictions on transactions
This order does not completely prohibit the use but makes any transaction between Byte Dance and U.S. citizens illegal. This means that TikTok’s parent company can no longer send software updates to users in the United States. Over time, this will make the app unusable.
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These restrictions could also affect TikTok’s immediate revenue stream advertising. Trump’s order will prevent US companies from buying ads on TikTok.
But sanctions did not take effect immediately. The executive order of Trump against TikTok and WeChat is due to come into force within 45 days. It doesn’t take a lot of time, but it is long enough for an American buyer to close an acquisition.
The Executive Order cites national security concerns as to its main factor. Like many technology companies, Byte Dance collects data from its users.
But the Chinese government’s tight grip on business does not sit well with the White House. The Trump administration fears that the Chinese government could very easily access user data from American TikTok users.
The executive order is as follows:
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“This database threatens to allow the Communist Party of China to access the personal and privacy information of Americans – allowing China to track the whereabouts of federal employees and contractors, create personal information documents for blackmail, and conduct corporate espionage.”
TikTok claims to store US information in Virginia, and in Singapore, despite fears. However, the White House is not ready to take the opportunity.
Pressure to sell
The clock is ticking for Byte Dance to sell the app to an American buyer. Last Friday, Seattle-based Microsoft announced it was exploring the TikTok acquisition, just hours before Trump’s first public comments about banning the app.
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The next day, Trump met with Microsoft CEO Satya Nadella.
By Sunday evening, Microsoft had announced that it was seriously considering the acquisition. The agreement will allow Microsoft to operate TikTok in the United States, Canada, Australia and New Zealand.
Because Trump agreed to the plan only a few days ago, and the deadline for enacting sanctions with Microsoft’s temporary takeover deadline, it seems that Trump is using the executive order with a tough bargaining chip.
Byte Dance would have to accept a hefty fee and allow Microsoft to run the app in the US or lose the market altogether.
However, some wonder why the Trump administration has specifically targeted TikTok when there is no single application for sharing US user data with foreign companies. As Notre Dame Professor Kirsten Martin points out, “TikTok is being isolated,” but “their data collection and sharing practices are industry-high.”
“Actually, many fitness applications for tracking location data were banned for use in the military, but we did not ban them from all U.S. citizens,” Martin says.
Banning complex use across the country is an unusual reaction. Moreover, market disruption of this magnitude is not characteristic of sustainable Republican philosophy.
Unrestricted market sentiments are a cornerstone of conservatism, with most conservative thinkers denigrating restrictions on private sector interests. But as Trump faces re-election, he may see taking China harshly as an essential campaign tactic.
The TikTok ban often shadows the Wechat ban, but the latter also has an impact. WeChat is a multi-utility platform that allows messaging, social media and money transfer.
The White House order for the WeChat ban argues in this way:
“[Application] captures the personal and private information of Chinese nationals visiting the United States, thereby allowing the Chinese Communist Party a mechanism to keep tabs on Chinese citizens.”
But most US users of Wechat are not Chinese tourists. Instead, they live in the United States and they use the app to stay in touch with loved ones in China.
Trump’s executive order has already caused concern among the China-American community. After all, there are no US-based messaging apps in China, including Facebook Messenger, Snapchat, Instagram and G-Chat. That means there is no alternative for many American residents to communicate with Chinese relatives.
But, like TikTok, an American buyer is likely to step in if the demand for the app is adequate. As the deadline approaches, it will be an interesting 45 days for international business.