Donald Trump has ordered ByteDance to distill TikTok’s operations in the US within 90 days in a move aimed at protecting security that will put further pressure on the Chinese technology group to sell the short video app to an American company.
Mr. Trump also increased the pressure on the Chinese tech sector by ending a ban allowing certain U.S. companies to continue selling goods to Huawei, the Chinese manufacturer of telecommunications equipment, without a license.
The double moves marked the last steps of the Trump administration to take a much tougher stance on what the White House says are growing economic and national security threats of the Chinese Communist Party.
In his TikTok sequel, released on Friday night, Mr. Trump said there was “credible evidence” that ByteDance could take action to harm American security.
The president’s move to order ByteDance to distribute TikTok within 90 days follows a recommendation from the US Foreign Investment Commission (Cfius), a government panel that converts foreign acquisitions of US companies.
The order came one week after it issued a separate directive banning U.S. companies from dealing with TikTok, except that ByteDance sold the app to a U.S. group within 45 days. The latest move continues by providing a tough deadline for ByteDance to sell its TikTok operations in the US.
Microsoft has been in talks to buy the app. A senior U.S. official said the new order would add to the pressure on ByteDance to sell TikTok, as the value of the assets would fall over time as the 90-day deadline approached.
‘If not a deal [with Microsoft] is achieved, this could shut down TikTok in 90 days in the US, ‘said Kevin Wolf, a partner at Akin Gump who oversees the commercial department’s sanctions list until 2017.
Separately, the commercial department took aim at Huawei by ending an exemption that had granted a temporary refund to U.S. companies by allowing them to continue using Huawei’s unlicensed services.
Washington accuses Huawei of aiding China in carrying out cyber espionage – a claim that the company has repeatedly denied in Shenzhen.
The most lucrative beneficiary of the temporary exemption has been Google, which last year continued to update its Android operating system on old Huawei phones. Google and other groups will now have to apply for licenses to continue using Huawei.
The U.S. official said the White House was sending a signal to companies that they needed to reduce their business with Huawei and also that there would be an increasing obstacle to issuing licenses.
The biggest impact could be felt by small rural telecom companies that use Huawei equipment and have lobbyed for US companies to continue servicing and supplying parts for the gear. “This could mean that rural telecommunications networks will soon be darkened. Sure, that’s not what the Trump administration wants, ‘said one sector lobbyist.
Mr. Trump had taken a slower approach to Huawei than some hawks had hoped, as he tried to engage in trade talks with Beijing. But Mr Trump recently moved the bag over China for the US presidential election because he blames the Chinese government for the worldwide spread of Covid-19.
His pressure to take a tougher line on China has also given his administration a window to pressure him to take other actions against Beijing.
The White House last week sued Tencent, a high-profile Chinese technology company, by giving U.S. companies 45 days to stop dealing with WeChat, the ubiquitous Chinese messaging app owned by Tencent.
Mr. Trump recently imposed sanctions on Chinese and Hong Kong officials after Beijing imposed a draconian security law on the former British colony to crack down on pro-democracy protests against Beijing.
Steven Mnuchin, the secretary of the Treasury, who chairs the Cfius process, said Mr. Trump on Friday “issued an order banning the transaction that resulted in the purchase of Musical.ly, now known as TikTok “.
He added that ByteDance would have to distribute all the possessions that were used to “enable or support the operation of TikTok” in the US as well as all data that it has received or obtained from TikTok or Musical.ly users in the US.
ByteDance bought Musical.ly in 2017 and merged it with their existing TikTok app, which dampened growth of the video platform. Last year, Cfius opened an investigation into the purchase.
Earlier this week, John Demers, the top official of the U.S. Department of Justice’s security department, said Washington was increasingly growing over the Chinese government’s ability to collect U.S. citizens’ personal data through apps like TikTok. Mr. Demers said Cfius was expanding its approach as the threat to data grew with the continued use of smart technologies.
Follow Demetri Sevastopulo on Twitter: @dimi
