President Trump’s deadline for Chinese short video app TikTok to either shut down or sell its U.S. operations to an American company is about to expire. He will reportedly make a decision in the next 24 to 36 hours. White House Chief of Staff Meadows said on Thursday (Sept. 17) that he is concerned that the current arrangement between TikTok and U.S. company Oracle may not meet goals previously set by Trump.
CNBC reported Thursday that sources told one of the station’s financial reporters that President Trump is expected to decide TikTok’s fate in the U.S. within the next 24 to 36 hours.
TikTok, the overseas version of China’s byte-hopping company’s short video-sharing platform Shakespeare, has become a global phenomenon, with the app downloaded more than 1 billion times worldwide, including more than 175 million times in the United States, many of them by teenagers. However, the U.S. government and many politicians have expressed concern that the Chinese Communist Party government could gain access to Americans’ data and extend its censorship of speech to the United States.
Trump commented at a White House press conference on August 4 that TikTok was doing very successfully and that “it’s really great company. But we can’t accept the security risks of any of these companies.”
At the time, U.S. computer software giant Microsoft was in talks with TikTok to acquire the company. Trump told reporters: “Whether the deal gets done or not, we’re giving them until about September 15, and we’ll see if it gets done and if it can have good security, meaning obviously security. Microsoft will be a good company to work with in terms of approvals, including working with the Department of Defense, where they have high-level approvals. So that would be good. But there are other companies as well.”
President Trump officially issued an executive order on Aug. 6 that prohibits U.S. individuals and companies from trading with Byte and its subsidiaries for 45 days. President Trump issued another executive order on Aug. 14 requiring Tiktok to divest its assets in the United States.
China’s Ministry of Commerce announced in late August the latest version of the “China’s List of Technologies Banned from Export Restrictions,” effectively banning the sale of TikTok’s core algorithms and adding complexity to the TikTok sale deal.
Earlier this week, TikTok rejected a takeover proposal from Microsoft, opting instead to continue its U.S. operations under a “trusted technology partnership” with Oracle Corp.
To resolve the ownership issue, TikTok’s Chinese parent company, ByteDance, plans to conduct an initial public offering (IPO) of TikTok’s global business on the U.S. stock exchange, people with knowledge of the matter said. Oracle will also hold a minority stake of less than 20 percent in the newly listed company, two of the people said. Wal-Mart will also take a stake, they said, but the size is not yet known.
On Wednesday night, the U.S. Treasury Department made significant changes to the security aspects of the TikTok/Oracle letter of intent to invest. Sources said that Byte Jump has fully agreed to the changes, although the details of the changes are not yet clear.
Bloomberg News, citing sources with knowledge of the matter, said Oracle also agreed to the changes, which were made by the Treasury Department to address national security concerns about the deal. Trump has been meeting with members of his Cabinet and his advisers, including Secretary of State Mike Pompeo, Treasury Secretary Mnuchin and his son-in-law Kushner, as he decides whether to agree to the deal, the sources said. These advisors reportedly have different views on the issue.
The deal, which would allow ByteDance to remain a majority shareholder in TikTok’s U.S. business, would be inconsistent with Trump’s previous position. He has previously said that the only remedy to keep TikTok operating in the U.S. is to sell the company to a U.S. company.
White House Chief of Staff Meadows said earlier Thursday that they are reviewing the details of the deal to see if it meets the thresholds regarding U.S. national security and U.S. interests. He is concerned that the Oracle-TikTok deal could be a “repackaging.
My biggest concern is that if all we do is repackage it and still keep it as a company that’s primarily run by the Chinese government, that’s not going to serve the president’s original goals very well,” he said.
On Wednesday, Trump said he opposed the idea that Byte Jump would retain a majority stake in TikTok.
“We don’t like that from ByteTok’s point of view,” Trump said. “I mean, just conceptually, I can tell you I don’t like that.”
Trump had said at an Aug. 3 news conference that TikTok “will be shut down on Sept. 15 unless Microsoft or some other company can buy it and get a suitable deal done that will give the U.S. Treasury a lot of money.”
Trump on Wednesday stopped insisting that any deal TikTok struck would require a large payment to the U.S. Treasury. He said he was told by government lawyers that there was no way the government could collect money from the companies from the deal.
President Trump said, “If they’re willing to pay the government a large sum of money, they can’t get permission to do that because there’s no way to do it. There are legal ways to do that.”
A group of Republican senators have written a joint letter to the administration opposing Oracle’s partnership with TikTok, saying the proposal violates the president’s executive order. They argue that if they don’t get the core algorithm, and if they don’t completely cut ties with China’s Communist government on data issues, the U.S. security risk problem cannot be solved.
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