Trump blew up Tiktok and now no one knows what’s going on

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On November 12, TikTok faces a deadline that requires the company to be separated from its Chinese parent company, ByteDance.

The deadline comes from an executive order signed by President Donald Trump on August 14. But the decree does not specify any sanction or consequence in the event of failure to meet the deadline. This has created new questions about the government’s intentions towards TikTok, one of the world’s fastest growing social media services with 100 million users in the United States alone.

While Trump has tentatively approved a deal involving TikTok that may satisfy him, it is not yet final. Within hours of the November 12 deadline, TikTok filed an emergency petition with a federal appeals court on November 10 to preempt it.

“In the nearly two months since the President gave preliminary approval to our proposal to address these concerns, we have offered detailed solutions to finalize this deal,” TikTok said in a statement Tuesday evening.

The company added that without an extension of Thursday’s deadline, “we have no choice but to file a petition in court to defend our rights and those of our more than 1,500 employees in the United States.”

It’s unclear what happens next, legal experts say, recalling again how Trump, heading into the election as he was casting the ballot box in the polls, sought to spark an international trade controversy that has plunged the future of a huge social media platform. in doubt. Despite pressuring TikTok to reach a deal within a short period of time, Trump has apparently put the issue aside as he tries to save his presidential campaign with baseless allegations of electoral fraud. .

Now we are all trying to make sense of the pieces.

Trump forces a deal

Trump made TikTok a national target, embedding the company in a broader anti-China narrative that became a hallmark of his administration as he wrestled with Beijing over trade and commerce. Trump alleges that TikTok poses a national security risk because its Chinese owner could be forced to turn TikTok user data over to the Chinese government. TikTok denied the claim and said TikTok stores US user data in Virginia and Singapore outside of the reach of Chinese law.

Cyber ​​security experts have called the risk hypothetical, but that hasn’t stopped the White House from trying to freeze TikTok in the United States with a pair of executive orders. In response, TikTok sued the Trump administration, calling the White House decision “highly politicized.” TikTok users have played their own part in the saga, gobbling up tickets to a Trump campaign rally in Tulsa, Okla, in an effort to reduce the size of Trump’s crowd. The coup prompted the Trump campaign to buy ads urging supporters to support a petition to ban TikTok, which TikTok later cited in his lawsuit as evidence executive orders were political and retaliatory.
Trump’s first executive order announced restrictions on TikTok that were due to go into effect in September and made any business relationship with the company illegal. By executing this command, the Commerce Department attempted to ban TikTok from US app stores, banning downloads of the app. And he also said that by mid-November, internet backbone companies would be banned from carrying TikTok traffic. The two measures have now been temporarily blocked by federal judges in two separate lawsuits challenging the order.
The second order, which is the target of TikTok’s petition this week, demands that ByteDance divest TikTok. The order followed an investigation by the Committee on Foreign Investment in the United States (CFIUS), a federal agency chaired by the Treasury Department that reviews mergers and foreign investment agreements for potential national security impacts American.

The order requiring the sale of TikTok is light on details, saying the company must be divested by November 12. It doesn’t say what such a deal should look like, or what TikTok needs to do to continue operating in the United States. It doesn’t say what happens if TikTok doesn’t sell by the deadline.

The White House and the Commerce Department declined to comment. The Justice and Treasury ministries did not immediately respond to a request for comment. TikTok declined to comment.

Trump tentatively approved a deal involving TikTok, Oracle (ORCL) and Walmart wanted to respond to its claims that the social media platform poses a risk to national security. The proposal would see TikTok reorganized into a new global company headquartered in the United States, with US investors representing the majority of the new company’s shareholders. Walmart declined to comment. Oracle did not immediately respond to a request for comment.

But that does not mean that the second-order requirements have been met. The arrangement has yet to be finalized by CFIUS or the White House, raising the possibility that November 12 could come and go without a resolution. (Even if it gets US approval, the deal still has to be blessed by Chinese regulators, which adds an extra wrinkle that’s entirely separate from the confusion surrounding Trump’s orders.)

So many questions

Could TikTok face further penalties if its divestiture deal is not approved by the November 12 deadline? We don’t really know, experts say, in large part because the decrees are so open.

One possibility is that within the next 24 hours, CFIUS could agree to the terms of the deal and recommend Trump give final approval, said Harry Broadman, a partner in the Berkeley Research Group and former CFIUS official.

Another way forward could be that CFIUS could provide a 30-day extension to TikTok as the proposed deal continues to be considered. (TikTok said that despite the extension request, the company has yet to receive one, although time is running out.)

A third potential outcome is that TikTok misses the deadline and that Attorney General William Barr is suing the company to enforce Trump’s order. The order authorizes Barr to “take whatever steps are necessary” to execute him.

“At this point, the court would likely address the issues raised by ByteDance in its petition and decide to what extent it will enforce the order,” said Christian Davis, CFIUS lawyer at Akin Gump.

But even this path provides few answers. It’s unclear how a court might rule, and what action it might demand from TikTok, or what penalties might apply if the company – or the government – does not follow the court’s instructions.

Ultimately, although he has managed to outsmart Trump for the time being on much of the First Executive Order – the ban, including the app store and internet infrastructure restrictions – TikTok still faces a road uncertain.

The US government’s radio silence is not helping. After creating a huge uproar over TikTok ahead of the election, the Trump administration now appears unable to bring the crisis to a quick conclusion.

This could mean that the deal proposed by TikTok may not come to an end until President-elect Joe Biden takes office. And how his administration might weigh is even more ambiguous, according to experts, who say it’s far too early to speculate.

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