Trump gives TikTok 45 days to sell U.S. operations

Business & Technology

After a few days of indecision, President Trump has settled on an ultimatum for TikTok: Either sell your U.S. operations to an American company in 45 days, or be banned. Microsoft is in negotiations to buy it, but there are many uncertainties.

microsoft ceo satya nadella standing in front of a microsoft logo
Microsoft CEO Satya Nadella. REUTERS/Beck Diefenbach

The Trump administration first began intimating that it might ban TikTok, because of its Chinese ownership, nearly a month ago. By the end of last week, with a national security review by the Treasury Department looming, it was revealed that Microsoft was in negotiations to buy TikTok.

President Trump upped the drama by saying different things on consecutive days:

  • “As far as TikTok is concerned we’re banning them from the United States,” Trump said on August 1, catching Microsoft and TikTok by surprise and causing them to pause negotiations, the Wall Street Journal reported.
  • But then, “following a discussion between Trump and Microsoft CEO Satya Nadella, the Redmond, Washington-based company said in a statement on Sunday [August 2] that it would continue negotiations to acquire TikTok from ByteDance, and that it aimed to reach a deal by September 15,” per Reuters. The September 15 deadline was set by the Committee on Foreign Investment in the United States (CFIUS), Reuters adds.
  • Today, Trump confirmed that “TikTok would shut down on September 15 unless Microsoft or another company purchased it,” and “added that the U.S. Treasury Department would need to receive a lot of money in return for the deal, without explaining how that would work,” the New York Times reports.

Our takeaway: As John Sakellariadis writes on SupChina: “Under Trump, the U.S. seems set to tell China it was right to distrust foreign-owned social media apps.”

What happens next?

TikTok and Microsoft still need to hash out many details, and there are many uncertainties:

  • ByteDance has given up on a minority stake in TikTok, Reuters reports, but management in Beijing might prefer for the app to “become totally independent” rather than owned by Microsoft, according to the South China Morning Post.
  • A nationalist backlash against ByteDance CEO Zhāng Yīmíng 张一鸣 for not fighting harder against CFIUS has been brewing. The Chinese Foreign Ministry today urged the Trump administration to “stop abusing the concept of national security and stop pursuing policies of discrimination and exclusion,” per the WSJ.
  • White House adviser Peter Navarro is raising concerns about Microsoft on CNN, suggesting that the American company “could divest its Chinese holdings” to make the CFIUS review process smoother.
  • TikTok might soon set up a London headquarters, according to the Sun newspaper, per Reuters.

What’s unlikely to happen: Another Huawei-sized fight over technology between the U.S. and China. “ByteDance is not another Huawei and Beijing is unlikely to defend the company, said Chinese tech industry players,” Yuan Yang reports for the Financial Times.

What to watch for: More Chinese apps in the crosshairs. Secretary of State Mike Pompeo singled out WeChat in a recent interview, per the SCMP, and said that “there are countless more.” (Fact check: There really aren’t many other Chinese apps that have large user bases in the U.S.)

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