President Donald Trump has recently issued an order against very popular Chinese short video app, TikTok, stating that the app would be banned in the US effective in 45 days.
The order has been imposed on the TiKTok app’s Chinese owner “ByteDance”. This particular move could potentially affect the app stores that distribute popular apps in US. A similar kind of order was recently imposed against WeChat, a messaging app owned by a Chinese company called Tencent.
The banning order that Trump has recently issued comes under the International Emergency Economic Power Act. This act gives full authority to the president to regulate international commerce after declaring a national emergency in response to any internal or external threat to the country.
“The spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China continues to threaten the national security, foreign policy, and economy of the United States,” the executive order states. “At this time, action must be taken to address the threat posed by one mobile application in particular, TikTok.”
This particular move by Trump was made immediately after some serious drama involving the Chinese video app, TikTok. The President initially called for TikTok to be banned and then gave the app’s US operation a chance, as Microsoft entered into the picture by giving a proposal to purchase part of the app’s business. Neither TikTok nor Microsoft has responded with anything in the media regarding this matter.
The situation regarding the app has changed as quickly as the video scroll on the app. Microsoft has acknowledged it’s pursuing deal for the TikTok’s operation in US, Australia, and New Zealand. The deal might be a huge one, according to the report to The Financial Time, which has reported that Microsoft may be also interested in purchasing TikTok’s global operations. The entire deal could cost anywhere between $10 billion to $30 billion, CNBC reported. This huge deal may show different proposed deal structures.
The executive order keeps the windows open for Microsoft to reach a constructive agreement with TikTok, since it still has time. President Trump has proposed that the US should receive a portion of the agreement if the deal is established between the two parties. A lot of people are still in doubt if the government has the authority to request for payment out of a deal like this. Negotiations could be done within the next three weeks, CNBC reported, sooner than the September 15th deadline.
Just a day before the executive order was signed, the US Department of State made an effort to protect individual and corporate privacy. They have taken an initiative called Dubbed Clean Network, which includes removing from US app stores those that “threaten our privacy, proliferate viruses, and spread propaganda and disinformation.” Other companies have also shown interest, so it is unclear how they would establish a deal.
TikTok gained the attention of the Trump administration and other governments because of a concern that it fetches information on Americans and hands it over to Chinese government. The US Army and Navy have already banned the service members from downloading this app to any phone issued by the government.
“A win-win in the making,” Republican Senator Lindsey Graham tweeted in response to Trump’s new stance on Sunday.
The entire negotiation between ByteDance and Microsoft will be overseen by CFIUS, a US government panel which has all the rights to dismiss any agreement.
“Microsoft fully appreciates the importance of addressing the President’s concerns. It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury,” Microsoft said in a statement.
The relation between the US and China has gotten damaged due to several issues such as trade, Hong Kong’s autonomy, cybersecurity, and the spread of the novel coronavirus. TikTok has emerged as a flashpoint in the dispute between the two largest economies in the world.
On Monday, a state-backed newspaper called China Daily referred to ByteDance as a victim of a “Witch Hunt” by the United States.