The clampdown on Chinese companies by the United States is far from over. This certainly will not stop with Huawei. It appears that the U.S. now visualizes anything from China as a potential threat. Recent reports show that the U.S. has commenced a comprehensive containment of Chinese technology companies. The U.S. will not only ban hardware companies like Huawei, it will also prohibit Chinese software companies. The latest software company to feel the hammer of the U.S. will probably be TikTok.
There are speculations that the White House intends to completely block TikTok on the basis of “security issues”. Of course, the U.S. ban is usually on the basis of “security issues”. Well, TikTok may have a way out to avoid the U.S. ban – become an American company.
The White House economic adviser, Larry Kudlow, said that he expects TikTok to be stripped from its Chinese parent company ByteDance. TikTok has to come out of Bytedance and operate as an independent American company. A top White House official believes that this is better than banning.
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Pre-existing American ByteDance investors may takeover TikTok
According to the latest information, some American investors of Bytedance are discussing with the company’s top management. The discussion is on the possibility of jointly acquiring a majority stake in TikTok. Inside sources say that the negotiation is still in the preliminary stage and is a possible solution being studied by ByteDance. The company is exploring how to deal with the possible ban on the App in the United States. If these Americans succeed in taking over a majority stake, things will change within the ranks of the company. The U.S. government will certainly like this.
If TikTok does not look for a solution and the U.S. eventually bans the app, Americans can no longer use the popular short video application. The “Hong Kong Economic Times” also claims that TikTok’s parent company Bytedance is studying strategic alternatives, including the possible spin-off of Tiktok into a US company.
Presently, TikTok’s finances are doing so well. However, with the series of controversies surrounding the company, it needs to act fast or loose grounds. TikTok can not afford to lose the U.S. market. As things stand now, the U.S. is its largest market considering that this app has been banned in India. The South Asian country and the second most populous nation in the world used to be TikTok’s largest market. The U.S. House of Representatives passed a bill on July 20 prohibiting federal employees from using TikTok.
