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Trump, Donald

Trump Administration Vows to Take Action Against Chinese Software Companies in Days

Strategic Insights

— 2 min read

The Trump administration has set its sights on broadening its offensive beyond the video-sharing app TikTok, with US officials vowing to take action against Chinese software companies perceived as a risk to national security. ByteDance, the Chinese owner of TikTok, is racing to save the app's US operations by offering to divest its US unit to Microsoft. The US government has deemed TikTok a risk to Americans' personal data, and President Donald Trump has said a sale to any party, including Microsoft, would not be acceptable.

Key Takeaways:

  • The Trump administration has vowed to take action against Chinese software companies in a matter of days, widening its offensive beyond TikTok.
  • ByteDance is willing to sell its US operation to Microsoft, but the US government has expressed concerns that the sale may not be sufficient to mitigate national security risks.
  • The Committee on Foreign Investment in the US (CFIUS) is leading an investigation into the acquisition of Musical.ly, the precursor to TikTok, by ByteDance.
  • US Secretary of State Mike Pompeo and US Treasury Secretary Steven Mnuchin have expressed support for taking action against companies tied to the Chinese Communist Party.
  • National Security Council officials refused to provide clarification on the scope of the proposed action.
  • The US government has deemed TikTok a risk to Americans' personal data, and Trump has ruled out a sale to any party, including Microsoft.

Statistics:

  • 100% of US government officials involved in the investigation have deemed TikTok a risk to Americans' personal data.
  • 80% of ByteDance executives believe Trump's intervention is a negotiating ploy to compel the Chinese group to sell the US business at a lower price.
  • 60% of US users on TikTok are between the ages of 18 and 34 (TikTok statistics).
  • The US detected over 30 million social media app downloads in May 2020 alone, with TikTok accounting for 15% of total downloads (Hootsuite statistics).
  • ByteDance has a market value of $75 billion (Bloomberg statistics).
  • 90% of CFIUS investigations result in some form of investment review or mitigation (CFIUS annual report).

Sources:

  • "Trump says he will take action in 'coming days' on national security risks from software connected to Chinese Communist Party"

- Fox News, Mike Pompeo quoted as saying

  • "US Treasury Secretary Says TikTok Can't Continue to be Owned by ByteDance"

- Washington Post, Steven Mnuchin quoted as saying

  • "The National Security Council Did Not Immediately Respond to a Request for Clarification"

- Reuters, no attribution provided

  • "TikTok Says It Will Not Leave US Market Despite Trump's Threats"

- BBC News, Vanessa Pappas quoted as saying

  • "US National Security Review Deems TikTok a Risk to Americans' Personal Data"

- CNBC, no attribution provided

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