President Trump, in a new executive order Friday evening, set a 90-day deadline for China’s ByteDance to divest the U.S. assets of TikTok based on the U.S. government’s fears that the video app threatens America’s national security.
That means Beijing-based ByteDance will have until Nov. 12 to find a U.S.-based buyer (or buyers) for TikTok operations in America. The order officially forces the unwinding of ByteDance’s 2017 acquisition of Muiscal.ly, the lip-syncing video app that ByteDance migrated to TikTok the following year.
“There is credible evidence that leads me to believe that ByteDance” — through the acquisition of Muiscal.ly — “might take action that threatens to impair the national security of the United States,” Trump said in the order. The order didn’t detail what evidence the U.S. government has identified indicating that TikTok is a national security threat.
The latest Trump action is something of a formality in the administration’s push to eliminate Chinese control over TikTok’s presence in the States: The president last week already issued an executive order that prohibits U.S. companies from doing business with TikTok effective Sept. 20 unless the business is sold to an American entity by then.
Tech giant Microsoft has confirmed that it is in talks to buy TikTok from ByteDance and said it expects to conclude the M&A negotiations by Sept. 15. Trump has repeatedly asserted that the U.S. government deserves a cut of a TikTok sale, but there’s no legal precedent for that.
Trump’s new order concludes the national-security investigation into ByteDance and TikTok initiated in the fall of 2019 by the Committee on Foreign Investment in the United States (CFIUS), an interagency group led by the Treasury Department that has the authority to block foreign transactions involving U.S. entities.
“Today the President issued an order prohibiting the transaction that resulted in the acquisition of Musical.ly, now known as TikTok, by the Chinese company ByteDance,” U.S. Treasury Secretary Steven T. Mnuchin, who is the chair of CFIUS, said in a statement Friday. “CFIUS conducted an exhaustive review of the case and unanimously recommended this action to the President in order to protect U.S. users from exploitation of their personal data.”
ByteDance is required to get approval from CFIUS before it completes a sale of TikTok’s U.S. business.
In addition, once ByteDance concludes the sale of TikTok’s U.S. operations, it must destroy all data it has in its possession related to the app and “CFIUS is authorized to require auditing of ByteDance on terms it deems appropriate in order to ensure that such destruction of data is complete,” per Trump’s Aug. 14 order.
To verify ByteDance is complying with the order, the company — effectively immediately — must allow U.S. officials (as designated by CFIUS) to access “all premises and facilities of ByteDance and TikTok Inc… to inspect and copy any books, ledgers, accounts, correspondence, memoranda, and other records and documents”; to audit “any information systems, networks, hardware, software, data, communications, or property”; and to interview employees and executives.
U.S. Attorney General William Barr “is authorized to take any steps necessary to enforce this order,” Trump’s order said.
In a statement responding to the latest Trump order, TikTok didn’t address the new divestiture deadline or allegations by the administration that the app represents a security threat. TikTok has claimed it has never furnished U.S. user data to the Chinese government and asserted that it refuse to comply with any such request from the regime.
“As we’ve said previously, TikTok is loved by 100 million Americans because it is a home for entertainment, self-expression and connection,” the TikTok statement said. “We’re committed to continuing to bring joy to families and meaningful careers to those who create on our platform for many years to come.”