US President Donald Trump has signed an executive order that blocks all transactions with ByteDance, which is TikTok’s parent company. The ban will take effect in 45 days.
According to the order “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.”
President Donal Trump also mentioned India’s Ban on Chinese Application to support his move.
“The Government of India recently banned the use of TikTok and other Chinese mobile applications throughout the country; in a statement, India’s Ministry of Electronics and Information Technology asserted that they were “stealing and surreptitiously transmitting users’ data in an unauthorized manner to servers which have locations outside India,” Trump said.
WeChat, a texting app popular in china has also been banned for the same reason. WeChat’s parent company Tencent stock plunged up to 10% in Hong Kong due ban on WeChat despite the fact it only affects WeChat, not any other apps owned by Tencent. This wiped off $45 billion from Tencent’s market valuation.
This Order complicates the potential sale of TikTok operations in the US, Canada, Australia, and New Zealand to Microsoft. Although Microsoft had pledged that it will conclude the deal by 15th September. Five days before the ban will take effect, i.e 20th September. “There can be no assurance that a transaction which involves Microsoft will proceed.”
According to a report by Financial Times, Microsoft might also be looking to take over Global Operations which includes TikTok India.
The president used the International Emergency Economic Powers Act and National Emergencies Act as authority for the move which is highly unusual and is subjected to a legal challenge by TikTok.
The United States Senate also approved a bill from Senator Josh Hawley that bans federal employees from using TikTok on government-issued devices.