In early August, President Donald Trump announced an executive order that would severely limit access to Chinese apps TikTok and WeChat in the United States due to national security concerns. The order was slated to go into place on September 20.
TikTok received a blessing from Trump to remain active in the United States if ByteDance, the app’s developer, would sell its U.S. operations to an American-based company.
Just before the buzzer, ByteDance agreed to sell a minority stake to Oracle and Walmart. The U.S. Department of Commerce pushed back its deadline by one week (to September 27) to allow the companies to finalize the deal.
The deal isn’t likely what Trump wanted from the beginning; a new, U.S.-based company called TikTok Global will be formed with four-of-five board members being American. The fifth will likely be ByteDance and TikTok founder Zhang Yiming.
While there has been conflicting statements and reports on who really would have majority ownership and operation of TikTok Global, CNN Business has Oracle and Walmart owning a 53% stake in the company with ByteDance’s Chinese and international investors holding the remaining stake.
It also seems as though Oracle would host the app’s U.S. data on its computer systems and get to review its source code — taking away the national security concerns.
Trump, who originally wanted full U.S. control of the app’s U.S. operations, has seemingly settled for majority U.S. control. His say isn’t the only one that matters, though.
Shortly after Trump’s comments, Hu Xijin, editor-in-chief of the China state-affiliated Global Times, tweeted that Beijing would likely reject the deal “because the agreement would endanger China’s national security, interests and dignity.”
Ultimately, Trump has the ability to drop the hammer on the deal if he doesn’t agree with its terms, even if that means upsetting the app’s 100+ million active U.S. users.
China may beat him to the punch, however.
While pessimism isn’t my style, it’s hard to see everyone getting what they want here. ByteDance, Oracle, and Walmart may be able to find a deal that works for them, but China and the U.S. must put their stamps of approval on the deal as well.
With national security and dignity being a concern of both countries, it seems unlikely that common ground will be found.
There is benefit on both sides to keeping the app active in America, though. For Trump, he keeps over 100 million U.S. citizens happy. For China, the app gets to retain all those users after already losing its largest overseas market in India to similar national security concerns earlier this summer.
It’s hard to determine what a win for Trump looks like here. While it may seem like banning the app and taking a hard stance on national security is an easy decision, nearly one-third of the country uses the app. While the majority of those users are young, some could be voters, and taking away a highly-entertaining app could end up hurting him in November (and yes, some voters really would care that much, before you scoff).
At this point, Trump will weigh all of his decisions with the election in mind. If he believes banning the app will help him gain an edge in battleground states, he may go for it. But considering that he’s already eased back on his requirements for a deal, it seems as though he may be playing hardball.