Trump OKs TikTok Deal, Judge Halts His WeChat Ban

Mish

A California Judge temporarily blocked Trump's ban on WeChat. In other technology news, Trump approves the TikTiok deal.

Trump Approves TikTok Deal

The Wall Street Journal reports Trump Signs Off on TikTok Deal With Oracle, Walmart.

President Trump said he has agreed in concept to a deal under which Chinese-owned video-sharing app TikTok will partner with Oracle Corp. and Walmart Inc. to become a U.S.-based company, capping negotiations that have stirred debate over national security and the future of the internet.

“I have given the deal my blessing, if they get it done that’s OK too, if they don’t that’s fine too,” Mr. Trump told reporters at the White House on Saturday. 

With the announcement of a deal, the Commerce Department said it would delay a ban on U.S. downloads and updates for the TikTok app that was set to take effect at 11:59 p.m. Sunday. The ban is now set to take effect Sept. 27, but could be further delayed or removed if the proposed new partnership goes forward.

Deal Terms and Ownership

  • Oracle will take a 12.5% stake in the new entity called TikTok Global, and would provide secure cloud service.
  • Walmart will purchase 7.5% of TikTok Global and will provide e-commerce, fulfillment, payments and other services to the new company.
  • TikTok’s current owner, Beijing-based ByteDance Ltd., would retain roughly 80% ownership of the company, according to people familiar with the situation. But because ByteDance is about 40% owned by U.S. investors, the new company with equity stakes for Oracle and Walmart can be described as having majority American ownership, they said.

WeChat Ban Halted on Freedom of Speech Concerns

US Magistrate Judge Laurel Beeler Sided With WeChat on grounds of freedom of speech.

Beeler entered an order Sunday for a preliminary injunction blocking the federal ban on U.S. downloads and other functions from going into force as scheduled for 11:59 p.m. Sunday.

In her 22-page order, Judge Beeler agreed with free-speech arguments raised by the user groups, saying she is convinced that “there are no viable substitute platforms or apps for the Chinese-speaking and Chinese-American community.” 

“WeChat is effectively the only means of communication for many in the community, not only because China bans other apps, but also because Chinese speakers with limited English proficiency have no options other than WeChat,” she said in the order.

The mobile app, which has 19 million regular users in the U.S. and more than 1.2 billion users world-wide, enables users to send messages, make phone calls and transfer money. It also functions as a social-media platform and is widely used by companies in China—including U.S. companies operating there—for business communications and marketing.

US Security Threat Claim

The BBC notes Trump's security claim. 

The US Department of Commerce Secretary Wilbur Ross said in a statement that the decision to block the app was taken "to combat China's malicious collection of American citizens' personal data".

The department said WeChat collected "vast swathes of data from users, including network activity, location data, and browsing and search histories".

WeChat's Claim

WeChat insists encryption means others cannot "snoop" on your messages, and that content such as text, audio and images are not stored on its servers - and are deleted once all intended recipients have read them.

The Evidence?

If there is any evidence to support Trump's claim, can we please see it?

If not, this is best considered as nothing but another Trump power play on China.

Recall that Trump labeled imports of cars from the EU a security threat. 

Boy Cries Wolf

After that ridiculopus security threat charge regarding autos, there is not a single claim Trump or his administration makes that can be trusted at face value. 

That is what happens when you cry "wolf" when there isn't a wolf around for a thousand square miles.

A similar thing happened with Huawei, China's 5G technology company. Trump labeled it a security threat then stated he would negotiate on Huawei if China would buy more soybeans. 

Please see Where national security meets Trump’s transactional worldview.

The most damaging element of the episode is the president’s transactional response to a highly critical national security issue. He directly tied Huawei’s fate to the final outcome of the US-China trade negotiations — and further underscored his limited, and willfully superficial, view of the gravity of the Huawei challenge by noting defensively that US farmers will benefit hugely from the trade truce and by a future trade deal. 

Either this is outright crazy or Huawei was not really a security threat.

Since then, Trump has tried to block Huawei at every turn. There was no phase II deal.

Decoupling Madness

No one should take any of Trump's claims seriously nor trust any deal he makes. 

This is all about Trump's intent to decouple from China. And that idea is absurd.

For discussion, please see Trump Promotes Decoupling From China With No Clue as to How It Can Work

Mish

Comments (24)
No. 1-16
PecuniaNonOlet
PecuniaNonOlet

43 days till election. We live in Bizaaro world where a GOP President acts like CCNP. Every day amazes me.

Eddie_T
Eddie_T

Is there any data pertinent to our security left to mine here anyway? I think the court decision was made on some pretty questionable logic, fwiw....but this whole issue has never been anything but ironic to me. Both the US and China have gone full Big Brother some time back.

Casual_Observer2020
Casual_Observer2020

Now that everyone has figured out how to use Trump's own tactics against him it is easier. There are more anti-Trump lawyers that can easily formulate a case than the few Trump lawyers who file cases on no legal basis.

Casual_Observer2020
Casual_Observer2020

Huawei was a security threat bu China has manufacturing for many fortune 1000 firms in their country. Demand is also waning in the US for products. Trump lives in some fantasyland where he sees the US as some economic powerhouse of the 1950s. That world no longer exists.

Augustthegreat
Augustthegreat

tRump wants to have the absolute control and dominance on the world. Anyone who does not knee in front of him and kiss his ass is considered by him to be a national security threat.

Lance Manly
Lance Manly

This deal gives me a time warner/aol vibe, though much smaller it seems like the road to nowhere.

Zardoz
Zardoz

Tik Tok, Twitter, Google, Facebook, gooogle... Seriously? This is what the president is concerned with? We're having serious discussions about gibberish while the world burns around us.

Was the human condition always so spectacularly stupid, or am I just now noticing?

Sechel
Sechel

Tiktok denies the 5,000,000. The deal accomplishes nothing. This has more to do with kpop, a Trump mp rally and an ego more than national security

Maximus_Minimus
Maximus_Minimus

TikTok went to Wall Street when China wanted to present itself as a global player that is interested only in commerce. Under the new regime ushered in by Trump, China could buy out US investors' stake in TikTok and make it wholly Chinese, then ignore the US market and use Trump's ban as a marketing tool around the globe.
Only TikTok would lose credibility because noone like Julian Assange has ever emerged in China and can still walk free. Oh wait...

Augustthegreat
Augustthegreat

All these theatric plays are all about tRump’s ego for dominance rather than national security. Just look at the case of Wechat: it’s mainly used in the US by chinese or chinese-americans to communicate with families and friends in China, and some Americans who have close ties with China because of businesses. All of those users are very happy with WeChat.

Sechel
Sechel

China is saying Tiktok wil be a subsidiary . Tiktok denies 5 billion education payment. Ellison is not gaining control of Tiktok's software. This is another Trump charade. The Senate should be investigating and reigning Trump in. Instead they are preparing a bogus report on Joe Biden

dr smock
dr smock

"Trump isn’t wrong to be concerned about a Chinese company vacuuming up our personal data. Here’s what Kevin Rudd, former Prime Minister of Australia, said this week at Yahoo Finance Australia’s All Market Summit: “China has formally abandoned [former Chinese leader] Deng Xiaoping’s renowned strategic caution of hide your strength, bide your time, never take the lead. And instead, under Xi Jinping, there is now an explicit directive for China to assert its interests with countries around the world and also to assert its values.”
Yi-Zheng Lian, former chief editor of The Hong Kong Economic Journal is more blunt, writing in the New York Times recently that Trump is actually underselling China's soft power which he called “invasive, intrusive and dangerous” suggesting Beijing’s ambitions know no limits.
Trump and his administration have taken on other Chinese companies over potential transgressions, (a curious pre-proof, pre-emptive justification), most notably Huawei. And Lian points that the wildly popular U.S.-based, video-conferencing company Zoom, was “established by a billionaire Chinese immigrant, [and] uses software partially developed in China,” which he suggests the Chinese government could tap into, presumably in the dead of night, (which is day for them.) Again no proof of anything here either.
And Trump is right, that intellectual property protection has been a one-way street with the Chinese.
“The Chinese allow you to invest in the country but it must be a majority-owned Chinese company and you can only be a minority investor,” says Holger Mueller, a tech analyst at Constellation Research. “Anything you do that produces intellectual property in the country, you have to hand over the patents. You lose them, not only for China but globally.”

mkestrel
mkestrel

Sorry if its related to national security, you will never get to see it. Its easy to find a liberal judge in California to block anything Trump decides is required. In the end it will get supported by the Supreme Court.

Casual_Observer2020
Casual_Observer2020

Trump did this because of Kpop on TikTok pooping on his Tulsa rally. So predictable. Wait til you see what they have in store for the fall along with other groups online. Trump wont have the benefit of being the only one practicing asymmetric warfare like 2016.