The US-China trade war which started around 2017 has changed the global economy and created interesting dilemmas for many countries and companies. The latest company to be targeted by the US-China trade war is the company behind the popular social media app Tiktok. Tiktok is under scrutiny by the US government after concerns about the data security of United States citizens and government personnel. The proposed measures by President Trump could lead to a complete ban of the app in the United States although some legal officials debate whether this is plausible. The trade war will continue to evolve digitally as more technological innovations are caught in the crosshairs of the two world superpowers.
The US-China trade war has developed multiple fronts since 2017 and Tiktok is simply the newest one. Huawei is one of the largest 5G telecom companies and it has been a target for US officials due to accusations of spying. The battle over 5G technologies has developed into a cold war with pro-Huawei and anti-Huawei national policies like the pro-communist and anti-communist positions of the past. Multiple Asian countries have started to create free-trade agreements to counter US pressure and these agreements could be used by China to catapult economic influence of the region. Claims of territory in the South China Sea have been disputed by the US and this has led to close naval confrontations between the two nations. Finally, multiple consulates of the US and China have been closed as diplomatic retaliation. Tiktok’s dilemma is the newest battle to arise, but it begs the question of how much power the US government holds to retaliate against Chinese companies.
President Trump recently announced an ultimatum that could shape US foreign policy in future conflicts with Chinese companies. The Trump administration threatened to ban Tiktok if it was not sold to an American company by September 15th. Microsoft expressed interest in the deal and recently Trump has approved of the sale of Tiktok to Microsoft. According to some US officials the app poses a national-security threat due to the fact it is owned by “ByteDance” which is a Chinese company based in Beijing. It is unclear exactly how the government would block Tiktok given that the US has no legal precedent for blocking software across the country and that Tiktok could still be downloaded from non app-store sources on android and iPhone. According to Business Insider Tiktok plans to keep doing business in the United States for many years. Trump’s proposed ultimatum and the strong reaction it produced could impact future dealings with Beijing based corporations.
The political ramifications of presidential ultimatums could be a lethal weapon in the US-China trade war for years to come. A proposed ban affects all types of people from stakeholders, users, possible investors, and employees. Just the threat of banning Tiktok produced strong reactions within minutes of the announcement and most likely shook the Beijing company. The precedent of using national bans against companies that do not play nice with the US will be on the minds of any Chinese company that seeks to do business in the United States. This drastic action will most likely heighten tensions in US-China relations even more in the coming months.
Sources: https://www.cnet.com/news/trump-targets-tiktok-everything-you-need-to-know/, https://www.theverge.com/2020/8/1/21350578/tiktok-ban-president-trump-comments-order, https://www.businessinsider.com/trump-tiktok-ban-sold-by-sept-15-microsoft-2020-8, https://www.bbc.com/news/technology-53642260, https://www.aljazeera.com/ajimpact/trade-tiktok-china-decoupling-affects-200803144706785.html