The TikTok drama betrays increasing political desperation in the U.S.-China showdown

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Good morning.

Secretary of State Mike Pompeo said Sunday that the Trump administration will soon take action against Chinese software companies, like TikTok and WeChat, that present a risk to national security because they are “feeding data directly to the Chinese Communist Party.”

“President Trump has said ‘enough,’ and we are going to fix it,” Pompeo told Fox News.

Pompeo’s comments followed an odd sequence of events surrounding TikTok, a popular video app owned by a Chinese company, Bytedance. (If you are not a TikTok user, no worries. You can get the gist of it here, and then go on with your life.)

On Friday, President Trump said he was considering banning the app from the U.S. Fox Business reported that Microsoft was in talks to buy the U.S. operations of TikTok, which would both solve the national security concern and enhance Microsoft’s role in social media. (The software giant bought LinkedIn in 2016.) The Wall Street Journal confirmed that story, and put it in the lead position on Saturday’s print front page.

But then late Friday, flying back to Washington from a campaign rally in Florida, the President told reporters that he didn’t support the Microsoft deal, and instead intended to ban the company from operating here. “I have that authority.” Talks with Microsoft were put on hold.

Then, on Sunday, Microsoft said it is “prepared to continue its discussions” with ByteDance over the TikTok buy. Bytedance CEO Zhang Yiming told employees no final decisions have been made. Chinese media is comparing the potential sale with “forcibly taking the child out of Bytedance’s arms.”

TikTok has taken steps to paint itself as an American brand, hiring a former Disney executive, Kevin Mayer, as CEO. And it is on a hiring spree in the U.S. A sale to Microsoft could be priced at as much as $50 billion, investors say. A ban would cause much of that value to evaporate.

Perhaps the president is trying to get Microsoft a better deal? Perhaps he’s negotiating with China for something else? In any event, his position is at odds with Secretary Pompeo and Treasury Secretary Mnuchin, who reportedly support the Microsoft deal.

Stay tuned on this one. The U.S.-China showdown seems to be taking on an ever-deepening hue of political desperation. That’s not a route to good policy.

More news below.

Alan Murray
@alansmurray

[email protected]

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