Back in 2020, the now ex-president Donald Trump demanded that TikTok’s Chinese owner, ByteDance, sell the viral video app. He claimed that the app raised national security concerns because of the Chinese government having access to American users’ data. Now that Trump is no longer president, Joe Biden is, and with the app still being widely used in the US, will Biden continue where Trump left off? And more importantly, how will Biden’s actions inform the rest of the world of how he plans to form his stance towards Chinese tech companies, and to use other words, future relationships that effect big tech production?
The fate of TikTok will not be decided by Trump, that much is for certain, but it will be by Biden. The new president hasn’t vocalised much about the company or the broader terms of ever growing influence of Chinese technology within the US yet, as his attention falls on other matters for his first 100 days in office, leaving the issue unresolved and potentially open for more growth in the near future.
The US government agreed on Tuesday 12 January 2021, that it would extend the deadline involving the discussions over restrictions that specifically target TikTok to 18 February. This is almost a full month after Biden settles into office.
Sam Sacks, a fellow at the think tank New America told The New York Times that “My gut is that they’re hoping to ride this out, and hope that this is on the back burner and they can kind of skirt by under the radar,” when asked about ByteDance’s approach to the final days of the Trump administration.
That being said, Biden has also called China’s president, Xi Jinping, a “thug” according to the same New York Times article. The president has said that America must be tougher toward Beijing in future, however has yet to show or share details as to how that toughness will be implemented. We can expect a slightly more consistent approach, compared to Trump’s fluctuating aggression over the topic during his term in office.
Both TikTok and Biden have not made any outright comments on their future, and TikTok is not the only company with a stake in Biden’s approach to Chinese tech giants. Repercussions from Biden’s actions in the near future however, will be huge for the entire world. Trump’s administration has continuously pressed American companies and allies to halt Chinese telecom equipment from 5G wireless networks, it also tried to keep semiconductor equipment from Chinese makers, and proceeded to focus on consumer apps, such as TikTok.
Another ban, among other apps, to fall onto Biden’s administration from Trump was the payment app Alipay, which is owned by the Chinese giant Alibaba. In this case, you might be wondering how a social app like TikTok could cause such a big drama, but what to take from this is that no app is really just an app, it’s much more than that.
Technology, data and especially semiconductor advancements, are arguably more valuable today than any other industry. Although we can’t assume what stance Biden will take, we can be sure that big tech is something to watch very closely. As tech trading tensions rise between the US and China, the semiconductor industry fears such a large disruption that it could affect the tech industry’s global supply chain.
Both sides of the Pacific ocean are trying to develop strategies to lessen the risk of running out of such technologies like semiconductors (which in this day and age, every single tech item we have relies on), whether that may be done through hoarding supplies or looking to shift location of production facilities. While firms such as Intel and Micron Technology still make these chips in the US, the industry’s centre of gravity has shifted to Asia.
The Taiwan Semiconductor Manufacturing Co (TSMC) has more than half of the overall market for contracting manufacturing chips, and a stronghold on the most advanced chip and manufacturing technology—in other words, without Asia, the rest of the world will be left behind in productive dust. So, what now, Biden?
Yesterday night, Thursday 6 August, the Trump administration announced new restrictions on Chinese-owned apps TikTok as well as WeChat, which would ban transactions by any person or property within US jurisdiction from 20 September 2020.
While the move against TikTok’s Chinese owner Bytedance was not a huge surprise at this point, action against WeChat’s owner, the Shenzhen-based tech giant Tencent Holdings Inc. was surprising and worrying for many. This sharp escalation of the US’ confrontation with China is likely to be met with retaliation. Why is Trump banning transactions with TikTok and WeChat and which implications could it have for US companies?
The two executive orders that were released late Thursday cited national security concerns. For TikTok, the order basically sets a 45-day deadline for the acquisition of TikTok, which Microsoft has already been in talks with to acquire.
In his announcement, Trump accused WeChat, made by Tencent, and TikTok, made by ByteDance, of providing a channel for the Chinese Communist Party to obtain Americans’ proprietary information and carry out disinformation campaigns to benefit China’s interest.
“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 US president wrote.
While a ban against TikTok had already been announced by the president, his move against WeChat comes as a surprise for many. WeChat is used around the world but particularly by Chinese people to communicate with friends, read news and carry out business transactions. This means that such a ban could effectively cut off some communication between people in China and the US.
Speaking to The New York Times, Kirsten Martin, a professor on technology ethics at the University of Notre Dame’s business school explained: “While TikTok is being singled out in this executive order, their data collection and sharing practices are fairly standard in the industry. In fact, many fitness apps were banned from use in the military for tracking location data, but we did not ban them from all U.S. citizens.”
It remains unclear whether the new order will affect other businesses tied to Tencent, which is an investor in many popular American technology and gaming start-ups. The scope of the ban, including which transactions would be covered, still needs to be unveiled but it looks like it will have bigger consequences for WeChat than for TikTok, which could be ‘saved’ and bought by an American company such as Microsoft.
In a statement posted online, TikTok said it was “shocked” by the executive order. The US gaming industry—WeChat parent Tencent owns or has major stakes in popular games including League of Legends and Fortnite—could be collateral damage. Tencent is also widely invested in social media companies, including Snap. “We are reviewing the executive order to get a full understanding,” a Tencent representative said early Friday.
For weeks, Trump had been urged by a range of advisers to intervene with TikTok. Some of those advisers had counselled the president to follow the recommendations of a national security panel and allow Microsoft or another American company to buy the Chinese-owned app.
Other advisers pushed for bolder action. As the president flew back to Washington from Florida, he told reporters that he did not want TikTok to be acquired by an American company and that he would use his presidential authority to bar TikTok from operating in the US.
But that position didn’t last for more than two days. Officials implored people like Senator Lindsey Graham to explain to the president why the Microsoft deal was a good option. By Sunday, Trump had changed his mind but he had never truly seemed completely content with a specific approach.
It’s not yet clear how the ban will be enforced but users might end up looking for workarounds and other ways to download and use the apps. Or, many users may lack the patience and simply cease using both apps.