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Trump prohibits US companies from doing business with TikTok

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  • Trump issued an executive order Thursday evening prohibiting US individuals and companies from making “any transactions” with TikTok’s parent company ByteDance.
  • The order, which is set to go into effect in 45 days, claims TikTok “continues to threaten the national security, foreign policy, and economy of the United States.”
  • Trump previously said he would ban the app from operating within the US entirely, thought it’s unclear what legal authority he has to do that.
  • Microsoft has been in talks with ByteDance to acquire the app, and Trump said this week that he would require any sale to an American company to include a “very big” cut going to the US government.
  • Trump also issued a similar order Thursday concerning transactions with WeChat, which is owned by Chinse internet giant Tencent. 
  • Visit Business Insider’s homepage for more stories.

President Donald Trump issued an executive order Thursday that bans US individuals and companies from doing business with TikTok, which is owned by Chinese-based firm ByteDance, citing national security concerns.

The order, which is set to go into effect 45 days from Thursday, prohibits “any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States.”

It’s unclear at this point the extent to which either order is legal or enforceable, and both will likely face challenges in court.

Trump also issued a nearly identical order shortly after that targets WeChat, which is owned by Chinese internet giant Tencent, again citing national security concerns.

“The spread in the United States of mobile applications developed and owned by companies in [China] continues to threaten the national security, foreign policy, and economy of the United States,” the order said.

In the orders, Trump alleges that TikTok and WeChat’s data collection practices could “allow the Chinese Communist Party access to Americans’ personal and proprietary information — potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.”

TikTok did not immediately respond to a request for comment.

Other US politicians and government agencies, including Joe Biden’s campaign and several military and government agencies have issued bans on usage of TikTok by their staff over similar concerns. However, experts have pointed out that the app collects user data in similar ways to US-based competitors like Facebook.

The orders also claim that both apps censor content that the Chinese government considers “politically sensitive,”  such as content about Hong Kong protests and its treatment of Muslim minority Uyghurs.

Trump has ratcheted up his threats against TikTok in particular over the past few weeks, saying he would ban the app entirely if ByteDance didn’t sell its stake in TikTok to an American company by September 15.

Legal experts told Business Insider’s Paige Leskin that actually implementing an outright ban could be tricky, though the Trump administration could pursue workarounds to reach a similar outcome.

Microsoft said earlier this month that it was in talks to buy the stake, with the app reportedly being worth between $30 billion and $50 billion.

Microsoft declined to comment for this story.

Trump also promised to force any acquisition deal involving a US-based company to include a “very big proportion” of the sale price going to the US Treasury Department.

The president has the authority under a 1988 law to block foreign business deals pertaining to US companies if he considers the deals to be a national security threat, which he has used twice before to block deals involving firms from China and Singapore that were looking to acquire American companies.

Trump, who regularly blames the coronavirus pandemic on China and previously said his TikTok ban was meant to punish the country over its response, has also waged a years-long trade war with the country and previously penalized other Chinese tech companies including Huawei and ZTE.

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