White House puts Chinese apps on notice as Trump gives TikTok ‘45 days’ to reach Microsoft deal
- President Donald Trump was seemingly backing off his earlier threats to ban Chinese-owned TikTok
- Microsoft continuing talks to acquire the US operations of the video-sharing app after meeting with Trump
US President Donald Trump will take action against TikTok, WeChat and “countless” Chinese software companies that pose a national security threat to America, US Secretary of State Mike Pompeo said on Sunday, apparently widening the scope of attention the US government is paying to online tech platforms developed in China.
“These Chinese software companies doing business with the United States, whether it’s TikTok or WeChat, there are countless more … are feeding data directly to the Chinese Communist Party their national security apparatus,” Pompeo said in a Fox News interview. “It could be their facial recognition pattern, it could be information about their residence, their phone numbers, their friends who they’re connected to.”
“Those are the issues President Trump’s made clear we’re going to take care of,” Pompeo said. “He will take action in the coming days with respect to a broad array of national security risks that are presented by software connected to the Chinese Communist Party.”
Focusing on TikTok specifically, US Treasury Secretary Steven Mnuchin, whose department is overseeing a national security review of the company, said on Sunday that the company will need to be blocked in the US or sold to another company.
Pompeo’s warning to Chinese software companies came as Trump agreed to give the Chinese internet giant ByteDance 45 days to negotiate a sale of the popular short-video app to Microsoft, according three people familiar with matter, Reuters reported.
Trump said on Friday he was planning to ban TikTok in the United States after dismissing the idea of a sale to Microsoft.
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TikTok denies it could be a tool for Chinese intelligence. But all members of the Committee on Foreign Investment in the United States (CFIUS), an inter-agency review body housed within the Treasury Department agree that TikTok “cannot stay in the current format because it risks, sending back information on 100 million Americans”, Mnuchin said in an ABC interview.
CFIUS reviews foreign acquisitions of US companies to ensure such transactions do not create national security risks. The body’s mandate was broadened two years ago in response to concerns about China, which gave it the authority to review acquisitions retroactively. ByteDance acquired US social media app Musical.ly in 2017 for US$1 billion, and rebranded it to form TikTok.
The mobile platform, which lets users create and share 15 second videos with custom music clips, has built a huge user base in the US, particularly within younger age brackets.
Mnuchin added that he had spoken with Chuck Schumer, the most senior Democrat in the Senate, and House Speaker Nancy Pelosi, also a Democrat, about the issue and that they all agree that a sale or a block on the site would be necessary, using the authority of International Emergency Economic Powers Act, if needed.
Responding to the drumbeat of comments about TikTok over the past week, the company’s general manager for US operations, Vanessa Pappas, told users on Saturday that the company was working to give them “the safest app” and that “We’re not planning on going anywhere”.
The comments by Trump’s cabinet members follow a series of reports over a possible sale of TikTok by ByteDance, which operates a similar short-form video platform in China called Douyin. ByteDance is backed by domestic and international investors including SoftBank Group, Sequoia Capital, General Atlantic and Yunfeng Capital.
Microsoft was seeking to conclude the negotiations by September 15, according to a statement from the company made following a conversation between CEO Satya Nadella and Trump.
It was not immediately clear what changed Trump’s mind. Banning TikTok would alienate many of its young users ahead of the US presidential election in November, and would likely trigger a wave of legal challenges.
Microsoft added that it would ensure all private data from TikTok’s American users is transferred to and remains in the United States.
“Microsoft fully appreciates the importance of addressing the president’s concerns. It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury,” the statement said.
The company added that there was no certainty a deal would be reached.
ByteDance, Microsoft and the White House did not immediately respond to requests for comment.
A source who was briefed on the discussions had earlier told the South China Morning Post that ByteDance founder Zhang Yiming and investors were reluctant to sell to the US company.
In an email to employees, Zhang said the company initiated “preliminary discussions with a tech company to help clear the way for us to continue offering the TikTok app in the US”.
“We disagree with CFIUS’s conclusion because we have always been committed to user safety, platform neutrality, and transparency. However, we understand their decision in the current macro environment.”
Additional reporting by Reuters