Trump Orders TikTok’s Chinese Parent to Sell Its U.S. Assets

14 Aug by Vitaliy Dadalyan

Trump Orders TikTok’s Chinese Parent to Sell Its U.S. Assets

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Trump Orders TikTok’s Chinese Parent to Sell Its U.S. Assets(Bloomberg) — President Donald Trump on Friday ordered the Chinese owner of the popular music video app TikTok to sell its U.S. assets, citing national security concerns and delivering the latest salvo in his standoff with Beijing.Trump’s decision came after an investigation by the Committee on Foreign Investment in the U.S., which reviews acquisitions of American businesses by overseas investors for national security concerns. ByteDance Ltd. bought the app Musical.ly in 2017 and merged it with TikTok.Trump said in the order released Friday night, which has a 90-day deadline, that ByteDance “might take action that threatens to impair the national security of the United States.”Treasury Secretary Steven Mnuchin said in a statement that “Cfius conducted an exhaustive review of the case and unanimously recommended this action to the president in order to protect U.S. users from exploitation of their personal data.”The panel, which is led by the Treasury secretary, includes officials from across 16 government departments and agencies, including State, Defense and Commerce. The White House referred questions to the Treasury Department.“As we’ve said previously, TikTok is loved by 100 million Americans because it is their home for entertainment, self-expression, and connection,” TikTok said in a statement. “We’re committed to continuing to bring joy to families and meaningful careers to those who create on our platform for many years to come.”The order on Friday sets out a different timeline than one set by an order issued on Aug. 6, which banned U.S. citizens and companies from doing business with TikTok. That order becomes effective after 45 days, though Trump said on Thursday that “we have a deadline of Sept. 15,” reiterating his timeline for a sale.The Friday order sets out a 90-day period for a possible sale.The orders, and another one on Aug. 6 that singled out WeChat, owned by China’s Tencent Holdings Ltd., are consistent with the administration’s increasingly aggressive posture toward Chinese technology giants as relations with the Beijing government deteriorate and as Trump faces a tough re-election campaign.In July, for instance, the State Department imposed visa restrictions on Huawei Technologies Co. over the Chinese Communist Party’s human rights abuses, including against Muslims and other minorities.The U.S. has said that Huawei’s technology could be used by China’s government to spy on Americans. The company has repeatedly said that it is independent of the government.Microsoft Corp. is exploring an acquisition of TikTok’s U.S. operations and it’s possible that other potential buyers could come forward, sparking a potential bidding war for the assets.Microsoft said it did not have an immediate comment.Microsoft’s industry peers — Facebook Inc., Apple Inc., Amazon.com Inc. and Alphabet Inc. — fit the profile of potential suitors, though all are under antitrust scrutiny from U.S. regulators, which would likely complicate a deal.A divestiture also could prove technically challenging since it would require rewriting the codes and algorithms that underlie the platform.TikTok has hired almost 1,000 people in the U.S. this year and had planned to employ thousands more but the hiring spree is now on hold, a spokesperson said Friday.In June, the company figured in an embarrassing episode for the president when some users tried to disrupt his campaign rally in Tulsa, Oklahoma, by registering for thousands of seats at the event. Only a few thousand people showed up, leaving Trump speaking to a largely empty arena.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.