President Trump reportedly has signed an executive order banning all kinds of deals with ByteDance, TikTok‘s parent organization. The move has been initiated in a bid to ban the video making app within the US. The order states that it would tackle any national emergency connected to the information and communication technology supply chain. However, this will not be executed immediately as it has a deadline of 45 days.
The order states, “The spread [of apps controlled by the Chinese government] continues to threaten the national security, foreign policy, and economy of the United States. The United States must take aggressive action against the owners of TikTok to protect our national security.”
Reportedly, the president has also signed a parallel order stating that transactions with WeChat ought to be stopped. WeChat is a very popular messaging app in China. It has a very small user base in the US.
President Trump has signed this order after days of increased anxiety and stress that was taking place between the US and China with regards to TikTok. Secretary of State Mike Pompeo and others at the White House had expressed fears regarding TikTok on account of its appended national security threat owing to its Chinese ownership. Last Friday, Trump addressed a few reporters aboard Air Force One, wherein he had stated that he would make use of some special powers if required to ban TikTok.
Things have been getting all the more complex, with Microsoft deciding to acquire TikTok. On Sunday, the tech giant CEO, Satya Nadella, stated that he had discussed the plan of acquiring portions of TikTok based in the US, Canada, Australia, and New Zealand with the president himself. However, there is still a lot of clarity required regarding most of the deal. The firm has also stated that discussions regarding the same are still in the preliminary phase, and “there can be no assurance that a transaction which involves Microsoft will proceed.”
Microsoft had also stated that it planned to finish all discussions about TikTok latest by September 15th. And now, Trump has signed an order stating that it would not entertain any transactions with ByteDance after September 20th. Here comes precisely five days after Microsoft’s deal deadline.
Both the orders signed by President Trump mention the rights of the International Emergency Economic Powers Act and the National Emergencies Act. It further states that TikTok’s operation within the United States would be nothing less than a national emergency. This kind of move is not very common and could face some lawful challenges.
The executive branch can impose penalties against individuals and corporations by putting them on the “entity list.” A similar treatment of this sort was meted out by the US against Huawei and ZTE during the previous year. However, such penalties are usually imposed by the Commerce Department instead of the White House. And all of this is subject to a specific rule-making process that has now been cut short due to Trump’s executive order.
The president could also make use of the Committee on Foreign Investment in the United States (CFIUS) and force the US companies to sell off their foreign ownerships. But again, a specific process needs to be followed here, which may not be necessary now owing to the executive order.
One has to wait and watch how this order would affect TikTok’s prospects of functioning within the US. The company does not need any special licenses like Huawei and ZTE for its operations. There is nothing mentioned in the order on whether the app stores would stop hosting the app. However, the order specifically covers all the subsidiaries of ByteDance, mainly targeting the TikTok base established within the United States. Any financial orders to and from these subsidiaries would be scrutinized. Thus, TikTok may file a stay order in the court or be forced to abandon its services within the country, once the order is executed.
Image source: TheVerge