Donald Trump’s repeatedly postponed order to force the company that owns TikTok, China’s ByteDance, to sell its operations in the country to a US outfit if it wanted to avoid an outright ban has been shelved by the Biden administration.
The decision illustrates the marked difference in leadership style between the current and previous administrations, although it still leaves open the decision as to what actions to take with respect to a country, China, whose companies operate abroad freely while Beijing protects its home market zealously.
In an increasingly globalized world, Chinese companies have had almost complete freedom to expand into other countries. At the same time, China imposes clauses that force co-investment with Chinese shareholders or simply uses its Great Firewall to keep out technology companies. This lack of reciprocity has allowed its companies to grow without foreign competition in the domestic market, or even to copy products from foreign companies that are banned from accessing that market.
Faced with this lack of reciprocity, Donald Trump launched a trade war, with blacklists and restrictions on several Chinese companies. But in the case of TikTok, the behavior of the Trump administration bordered on looting: the company is far from saintly, with potentially illegal practices in processing the personal data of its customers and, above all, of minors; but it is one thing to consider sanctions and fines, and quite another to try to force it to sell its operations on US soil under threat of a ban. Obviously, the executive order put the company at a significant negotiating disadvantage: all a potential interested party had to do was wait for the date of the hypothetical ban to approach, so as to be able to obtain a better price. We should not forget that Donald Trump was angered by the way the social network had been used by his youthful opponents to boycott some of his rallies and election events, which gave the whole operation an air of vendetta that was very much out of place in a democracy.
Under these conditions, Microsoft, Oracle or Walmart’s predatory interest in acquiring a thriving social network such as TikTok was no surprise, even if they were taking advantage of a political fight. Matters took an even more vulturine turn when Trump demanded his government’s cut for any sale.
Logically, ByteDance raised a well-argued legal battle against the Trump administration’s decision: according to any standard of business practices in the United States, the operation was abusive. The argument of reciprocity and the Chinese government’s actions towards foreign companies was valid but lacked any moral legitimacy: democratic countries do not act like China; not so much for any supposed moral superiority, but simply out of respect for the rules of international trade.
But Trump soon found himself mired in election controversy, reduced to calling for a pathetic coup d’état, and left the TikTok affair completely unresolved. Now, a new US administration has decided to move on and shelve the whole shameful episode as simply another event in the dark days of the Trump administration.
Does this mean that TikTok has won the battle? Beating Trump isn’t difficult: simply playing by the rule book and waiting for the worst president in the history of the United States to slip up is usually enough. But neither will TikTok get away scot-free: from here on, the Biden administration must re-examine the situation with China, the conditions under which US companies operate in the country, and obtain all the international support it can to put pressure on the Asian giant to get better reciprocation. In the specific case of TikTok, this should include monitoring the company, particularly what it does with the data of US citizens, and make sure it plays by the rules, including how it treats minors.
In terms of leadership, confusing a temporary withdrawal with weakness would be a serious mistake: just because the Biden administration does not want to get sidetracked with TikTok doesn’t mean it won’t look into the company’s affairs, or try to get China to adhere to the rules of international trade. But there are ways of going about these things by appealing to international consensus rather than behaving like a schoolyard bully. That is called responsible leadership. Precisely what was missing during Donald Trump’s four long, dark years.