If TikTok fails to find a suitable buyer, the app would be compelled to cease its operations in the US, and US hosting services would be prohibited from providing support. While users could retain the app on their devices, the lack of updates would lead to its gradual deterioration. The deadline for compliance is set for Jan. 19, just a day before Trump’s term ends, although President Biden has the authority to extend the deadline by 90 days if he opts to do so. TikTok contested the law, but a federal appeals court ruled against the company in December. The case is now being appealed to the Supreme Court, with a hearing scheduled for Jan. 10.
Former President Trump has been unpredictable in this matter. In 2020, during his final year in office, he signed an executive order aiming to remove TikTok, citing concerns about the Chinese Communist Party exploiting the app’s data for nefarious purposes. A judge struck down the order shortly before Trump departed office. The 2024 law mirrors Trump’s previous order but is more comprehensive and legally sound as it is legislation.
Trump’s stance has shifted over time. Initially against a TikTok ban, Trump later expressed support for it, suggesting it would benefit rival Facebook. This change in perspective may have been influenced by Facebook blocking Trump’s account after the Jan. 6, 2021, riots at the US Capitol. Despite efforts by Facebook’s Mark Zuckerberg to mend fences, Trump appears to side with TikTok. His legal team filed a brief urging the Supreme Court to delay a decision until he assumes office, citing his opposition to banning TikTok in the US at present.
The future of TikTok remains uncertain. The likely outcome is that the Supreme Court will uphold the 2024 law, compelling ByteDance to sell TikTok. Potential buyers are already interested, including Elon Musk. Trump, seeking recognition, may attempt to influence events to claim credit. Divesting TikTok would present a setback for Chinese President Xi Jinping, as it would involve a Chinese company complying with US directives.
Trump’s approach to trade with China is also under scrutiny. While he has proposed steep tariffs on Chinese imports, he has hinted at concessions if China addresses the flow of fentanyl to the US. This contrasts with his prior rationale of reducing the US trade deficit with China. Trump and Xi may use trade negotiations as a platform to claim victories on different fronts.
The United States and China may boast of unity even in times of uncertainty, their leaders proclaiming breakthroughs in tackling the flow of fentanyl, despite minimal tangible outcomes. Chinese President Xi Jinping, exuding power and Hollywood-like charm, delivered a New Year message from Beijing on Tuesday, December 31, 2024.
Former President Donald Trump, in a surprising turn, has been offering somewhat complimentary remarks towards Xi Jinping of late. In 2023, Trump lauded the Chinese leader as a “brilliant man” with striking Hollywood appeal. This sentiment was echoed in a more recent statement, where Trump expressed admiration for Xi’s ability to maintain control over 1.4 billion individuals with an iron grip. In a gesture of camaraderie, Trump extended an invitation to Xi for his January 20 inauguration, an offer which Xi politely declined.
Despite declining the inauguration invitation, Xi Jinping may have found solace in Trump’s remarks last summer regarding Taiwan. Trump suggested that Taiwan should compensate the United States for its implicit commitment to support the island nation in the face of potential Chinese aggression. Since its separation from mainland China in 1949, Taiwan has evolved into a capitalist democracy, while Xi Jinping aims to reunify the island under communist rule by 2027, even if that requires military intervention. Though Trump has not explicitly endorsed such actions, his administration has adopted a more cautious stance towards Taiwan compared to previous presidents.
Trump’s tenure in office witnessed a shift in the American perspective on China, with a greater emphasis placed on the threats posed by the Asian powerhouse rather than the economic benefits derived from trade. This change in rhetoric could potentially undergo further transformation under his leadership. With a substantial following of 14.7 million on TikTok, Trump’s moves are observed closely by a global audience.
Rick Newman, a distinguished columnist for Yahoo Finance, provides insightful analysis on the evolving political and economic landscape. For updates on impactful business and monetary policies shaping future stock trends, stay informed with the latest news on Yahoo Finance.
