Trump risks playing into China’s hands by demanding a US government cut of any Microsoft-TikTok deal

  • President Trump risks giving ammo to his geopolitical rivals with his eye-opening demand for a Treasury cut of any sale of TikTok’s US business to a US firm.
  • Trump explicitly stated on Monday that if lead bidder Microsoft or another US firm were to acquire TikTok from its Chinese parent ByteDance, “the US should get a very large percentage of that price.”
  • China reacted furiously, with the state-owned China Daily writing: “China will by no means accept the ‘theft’ of a Chinese technology company, and it has plenty of ways to respond if the administration carries out its planned smash and grab.”
  • This is propaganda, but Trump’s attitude makes it look like a reasonable position.
  • Microsoft also risks its reputation by continuing to discuss a deal with TikTok now that Trump has publicly interfered.
  • Visit Business Insider’s homepage for more stories.

On Monday, President Trump made some eye-popping remarks about the future of wildly popular short-form video app TikTok.

Speaking to journalists on Monday, the president suggested that the US Treasury should get a cut of the deal if TikTok’s US business is acquired, or partially acquired, by an American company. TikTok is currently owned by Chinese tech firm ByteDance, and is wildly popular with more than 2 billion global downloads.

The lead bidder for TikTok’s business in the US is currently Microsoft, though others are thought to be circling. On Sunday, Microsoft rather unusually confirmed it was in talks to acquire parts of TikTok’s business in North America, New Zealand, and Australia, though not in Europe.

Equally unusually, Microsoft also said its CEO Satya Nadella had spoken directly to Trump about the prospective deal.

Here’s what Trump said on Monday about talking to Nadella and potentially getting a slice of that deal. His remarks, as is often the case, are not totally coherent but the intent is fairly clear:

“I did say that if you buy it, whatever the price is that goes to whoever owns it — because I guess it’s China, essentially […] I said a very substantial portion of that price is going to have to come into the Treasury of the United States, because we’re making it possible for this deal to happen,” said Trump.

This is an astonishing situation for the president, and Microsoft, to be in.

The discussions between ByteDance and Microsoft come after months of unsubtle and unproven claims by the Trump administration that the TikTok app spies on American users by hiving off their data to China. The administration has never shared proof of this in public, and ByteDance has consistently denied the claims.

We are now at a point where Trump, who now says TikTok will be banned in September if it can’t find a buyer, has essentially strongarmed ByteDance into mulling a sale to a US tech giant.

His public interference has stoked Chinese anger.

The China Daily wrote in response to Trump’s remarks: “China will by no means accept the ‘theft’ of a Chinese technology company, and it has plenty of ways to respond if the administration carries out its planned smash and grab.”

This narrative is an inversion of long-running complaints by American corporates of Chinese IP theft, but Trump’s attitude now makes China’s propaganda look almost reasonable.

What kind of precedent will this set? Why is Microsoft continuing to entertain this deal now that Trump has publicly interfered? And how does this interplay with, and possibly undermine, the delicate efforts of the House Judiciary subcommittee to investigate anti-competitive behavior by the US tech giants?

It is possible to be concerned by the security threats potentially posed by Chinese technology to the US and other Western nations, while also being alarmed by Trump’s unashamed political meddling.

Facebook’s former privacy chief, Alex Stamos, put it pithily in a Venn diagram:

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