Burgeoning “Technology Cold War” between the U.S. and China

TikTok, a popular short video-sharing app, and WeChat, China’s largest messaging app, are at the center of an ongoing, tense standoff between the United States and China, as President Trump, in the interest of national security, moves to curb Chinese technological and commercial influence in the United States. 

On Sunday, United States district judge Carl Nichols granted TikTok’s request for a preliminary injunction against its ban from U.S. app stores. Nichols’ ruling blocked Trump’s executive order that barred TikTok from U.S. app stores, citing national security concerns in user data collections, starting September 20. However, the injunction only applies to TikTok’s September ban, which allows the November 12 ban to move forward. Notably, this date comes after the November election, which addresses how the app may hurt Trump’s chances with younger voters. It also gives TikTok more time to finalize a deal with a U.S. based company. 

Another setback in Trump’s China foreign policy agenda occurred last weekend when a federal magistrate ruled in favor of blocking Trump’s WeChat ban. The decision came after U.S. advocates for the multimedia tech giant claimed the ban infringed on their First Amendment right for freedom of speech. 

Trump’s ultimatum that TikTok and its algorithm be fully transferred to a U.S. entity left TikTok scrambling to close a deal. Trump threatened to block any deal that left the service in Chinese hands: “If we find that they don’t have total control, then we’re not going to approve the deal.” However, a tentative deal between ByteDance (TikTok’s parent company), Oracle, and Walmart seemed to get Trump’s stamp of approval. The proposed arrangement will create a new, separate company called TikTok Global, which will be owned by majority U.S. investors like Oracle and Walmart. It also gives Oracle full control of technological operations in the U.S., soothing concerns from the U.S. that Chinese-based ByteDance was sourcing information and user data to the Chinese government. 

However, tension remains about the ownership structure of TikTok Global. ByteDance claims that they will have majority ownership (80%) of the company until it goes public within the next year. Oracle said last week that once TikTok Global is launched, U.S. stakeholders would take over, and ByteDance would lose its ownership stake in the company. Ken Gleuck, an executive at Oracle, said in a statement: “the creation of TikTok Global, Oracle/Walmart will make their investment and the TikTok Global shares will be distributed to their owners, Americans will be the majority and ByteDance will have no ownership in TikTok Global.” 

Because of this conflict, the transaction remains tentative and could fail to meet the U.S.’s national security guidelines. Doubts from the U.S. have also emerged because of how the deal was characterized online in China; ByteDance reportedly claimed that the algorithm, a major selling point of TikTok because of the national security risk it poses, would not be transferred over to Oracle and Walmart. The deal is also unlikely to gain approval from the Chinese government, as it would likely hurt China’s national security interests and dignity. 

WeChat and TikTok first came under attack because of their rumored connection and cooperation with the Chinese government. There has been strong evidence of censorship from the Chinese government on WeChat. Chinese censors comb through chats and posts on the app daily to monitor or take down content that violates the Chinese government’s digital restrictions. Even American users are susceptible to censorship. TikTok’s history of censorship is much less conclusive, boiling down to one concrete incident where a user, raising awareness for the human rights violations occurring in the Uighur Muslim reeducation camps, had her video taken down and account deleted. Beyond that incident, there is some speculation of Chinese meddling in politics through TikTok by promoting anti-Trump sentiment on the platform and suppressing right-wing users. 

Trump’s decision for the ban comes from his larger China foreign policy plan that he instituted last month. He seeks to punish China economically and pressure its leaders to become more humanitarian, urging the release of thousands of Uighur Muslims from their “reeducation” camps. Trump claims he is “cracking down” on economic and political abuses from the Chinese government to the U.S., including the supposed infiltration and manipulation of the American democratic process by the CCP using Tiktok and WeChat, a direct threat to national security. 

The “technology cold war” between China and the U.S. has caused great uncertainty in Chinese tech companies’ future who will have to walk a fine line between both Chinese censorship and American regulations. For tech giants like TikTok’s founder Zhang Yiming and major tech companies based out of China, the option of globalization is severely limited by these newly imposed regulations. These companies’ legitimacy is consistently undermined by American suspicion of their susceptibility to coercion from the Chinese government.

Photo from Shutterstock.

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