US President Donald Trump has ordered the TikTok Chinese owner ByteDance to sell its US assets. He cited concerns about national security in his latest burst against Beijing.
Trump’s order follows the investigation of the Committee on Foreign Investment in the US. The unforeseen order trails the CFIUS timeline, says people familiar with the decision.
CFIUS is reviewing the planned purchases of American businesses by foreign investors for national security concerns.
ByteDance bought the app Musical.ly three years ago. And it merged TikTok to the app to make one unified social media experience. Trump’s decision calls to reverse that deal.
The ownership of Musical.ly has put Beijing-based ByteDance in hot waters. It “might take action that threatens to impair the national security of the United States,” Trump said in the order on Friday.
“CFIUS conducted an exhaustive review of the case and unanimously recommended this action to the president in order to protect US users from exploitation of their personal data,” US Treasury Secretary Steven Mnuchin said.
The Mnuchin-led CFIUS includes officials from 16 government departments and agencies such as Defense, State, and Commerce. The White House referred questions about the decision to the Treasury.
Trump told reporters on Saturday at his Bedminster, NJ, golf club that other Chinese firms may follow suit in his administration’s scrutiny.
“We’re looking at other things, yes,” Trump said when asked if other companies are in his crosshairs for banning.
The order on Friday sets a deadline of 90 days for a likely sale of TikTok to a US buyer. The CFIUS may extend it for another 30 days at its discretion.
As ordered, ByteDance and Chinese shareholders must divest and destroy the data of its US users from TikTok or Musical.ly.
Trump’s previous executive order prohibited US persons and firms from working with TikTok for 45 days starting August 6.
The dates offered suggest a TikTok buyer for its US operations still has a 45-day deadline to close a deal. And it would need to satisfy CFIUS in 90 days to comply with Trump’s latest order.
TikTok said it was “shocked by the recent executive order, which was issued without any due process.” It would “pursue all remedies available to us in order to ensure that the rule of law is not discarded.”
The orders are consistent with Trump’s hostile stance against Chinese technology firms. His relations with China have deteriorated. And he confronts a tough reelection campaign.
Negotiations with Microsoft are ongoing and people familiar with the discussions say it is far from sealing the deal.
Other American tech firms, such as Twitter, have delved into potential TikTok bids. We have yet to see how far those talks have progressed, says people familiar with the discussions.