Trump's Outrageous and Unconstitutional Demands On TikTok and Microsoft

Mish

Trump's keep changing his tune on TikTok. Each time the story gets more outrageous.

Trump's Changing Tune 

TikTok is a social media app developed in China and owned by  ByteDance.

Last week Trump said he would ban TikTok regardless of what happened for security reasons.  Microsoft was in negotiating a deal to buy the app when Trump made the announcement.

July 31 - Banning TikTok

Last Friday Trump said he would ban TikTok in the US despite the fact that TikTok claims it has 100 million US users. 

Over the weekend, Trump changed his mind and Gave Microsoft until September 15 to close the deal.

The deadline alone is ridiculous.

Now Trump demands Microsoft pay the US Treasury a substantial sum to allow the deal to go through.

https://twitter.com/CNN/status/1290411125750796290?s=20

Trump Demands a Chunk of TikTok Sale Price

TechCrunch reports Trump Calls TikTok a Hot Brand, Demands a Chunk of TikTok Sale Price.

After stating last Friday that he’d rather see TikTok banned than sold to a U.S.-based company, Trump changed his tune over the weekend.

Today the president, endorsing a deal between an American company and ByteDance over TikTok, also said that he expects a chunk of the sale price to wind up in the accounts of the American government.

The American president has long struggled with basic economic concepts. For example, who pays tariffs. But to see Trump state that he expects to receive a chunk of a deal between two private companies that he is effectively forcing to the altar is surreal.

Trump's Explanation

TechCrunch transcribed the pertinent few minutes of Trump's explanation from this morning's Hiring American Executive Order Signing, when asked about the weekend call with Microsoft’s Nadella. 

We had a great conversation, uh, he called me, to see whether or not, uh, how I felt about it. And I said look, it can’t be controlled, for security reasons, by China. Too big, too invasive. And it can’t be. And here’s the deal. I don’t mind if, whether it’s Microsoft or somebody else — a big company, a secure company, a very American company — buy it.

It’s probably easier to buy the whole thing than to buy 30% of it. ‘Cause I say how do you do 30%? Who’s going to get the name? The name is hot, the brand is hot. And who’s going to get the name? How do you do that if it’s owned by two different companies? So, my personal opinion was, you are probably better off buying the whole thing rather than buying 30% of it. I think buying 30% is complicated.

And, uh, I suggested that he can go ahead, he can try. We set a date, I set a date, of around September 15th, at which point it’s going to be out of business in the United States. But if somebody, whether it’s Microsoft or somebody else, buys it, that’ll be interesting.

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, but more than anything else, 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. Right now they don’t have any rights, unless we give it to ’em. So if we’re going to give them the rights, then it has to come into, it has to come into this country.

It’s a little bit like the landlord-tenant [relationship]. Uh, without a lease, the tenant has nothing. So they pay what is called “key money” or they pay something. But the United States should be reimbursed, or should be paid a substantial amount of money because without the United States they don’t have anything, at least having to do with the 30%.

So, uh, I told him that. I think we are going to have, uh, maybe a deal is going to be made, it’s a great asset, it’s a great asset. But it’s not a great asset in the United States unless they have the approval of the United States.

So it’ll close down on September 15th, unless Microsoft or somebody else is able to buy it, and work out a deal, an appropriate deal, so the Treasury of the — really the Treasury, I suppose you would say, of the United States, gets a lot of money. A lot of money.

How Would Payments Work?

The Wall Street Journal comments on the Unusual Nature of the TikTok Announcement

“It’s a great asset,” Mr. Trump said of TikTok. “But it’s not a great asset in the United States unless they have the approval of the United States,” he said, reiterating that the Treasury should get “a lot of money.”

The White House referred questions about how a payment would work to the Treasury Department. A Treasury spokeswoman didn’t respond to a request for comment.

The WSJl has a great video of the above transcription if you have access. It's worth a play. 

Surreal or Unconstitutional?

Trump would have legal challenges on banning the app alone, but his latest proposal is absurd.

TechCrunch commented on the "surreal" nature of the proposal. 

I suggest a different word. 

Telling business owners they have to pay the government a slice of any deal or the government will not allow it is blatantly unconstitutional.

Mish

Comments (50)
No. 1-23
Herkie
Herkie

Why you would think this was Яussia and he were Tsar Vladimir.

Be prepared people, it will take both republicans and democrats with force of arms to unseat this fat orange madman. For once we will have to work together.

anoop
anoop

things are moving fast so we need someone that can think on their feet. you snooze, you lose. haha

Anna 7
Anna 7

This Cold War heated up with the Pivot to Asia under Obomber. It’s heating up under the Orange Douche. Next, Creepy Joe will continue it. USAians usually vote for the lesser warmonger but it never matters.

USAians have zero control over policy. This is taxation without representation.

TonGut
TonGut

Ah the art of the deal. Go ahead as long as you pay my arbitrarily imposed transaction tax? That is even more moronic than imbibing Lysol.

PecuniaNonOlet
PecuniaNonOlet

And some people still want to re-elect this guy?

As for Microsoft interest in tiktok, I have a theory, think they want to harvest the data, in particular for facial recognition. Every time Microsoft comes by our corporate office with some new app, they always try to get employees to add their picture to their app profiles. I have refused everytime but the keep asking. Go over to LinkedIn and you will be endlessly harassed to upload your photo. Eventually, cameras will be everywhere and microsoft wants your face to track your every step probably for the goverment but social scoring wont be far behind.

Stuki
Stuki

Why not?

Getting a cut of the debasement theft, is all the incompetents running everything in financialized dystopias, are ever capable of doing.

Whether it's Microsoft throwing their share of the Fed loot at grossly overpaying for something they have exactly zero comparative advantage at exploiting as a tech company (meaning, they'll have their lawyers and paper peddlers exploit it, as well as TikTok's users, instead. That is, after all easy, so even incompetents on Fed welfare can do it), or Dunce-In-Chief trying to bully his way to a cut of the action as well.. Six of one, half a dozen of the other.Par for the course in Dystopia.

tokidoki
tokidoki

First Huawei 5G, then Tik Tok. I mean, is there proof that any of them is sending sensitive data to Beijing? Even if the answer is yes, why am I am more comfortable with Beijing knowing my crap than the NSA?

The US simply can't compete anymore. It's time to put this lumbering beast to sleep.

tokidoki
tokidoki

Trump is more comfortable playing Investment Banker in Chief than Commander in Chief.

gregggg
gregggg

Microsoft, which doesn’t have any social media products and TikTok to might just be the perfect contender. TikTok "supposedly" has 100 million users, so if that's they would perfect opportunity for Microsoft to carve out another niche for themselves. Why Trump and the Treasury has to be involved? Maybe to fund another shut down for Gates?

Realist
Realist

There's a new ”Don” in town and he’s running a Protection Racket.

Next, he will want the protection money sent directly to his ”organization”, instead of the US Treasury. After all, it was his idea.

George_Phillies
George_Phillies

I predict that the deal will crash.

Felix_Mish
Felix_Mish

It will be interesting to find out how accurate this latest click-bait is.

Microsoft buy TikTok? What exactly does that mean? Their code? Their brand? Some geographic subset of their customer base? Is it another Skype?

The larger question is which way the US goes:

  1. The free market way.
  2. The mercantilist way.

It's deja vu all over again. Anyone else remember a very similar question more than a half century ago? Remember how some claimed to believe in (1), but were frightened witless by a (2) - a gigantic, monolithic organization that, by virtue of being gigantic, monolithic, and vertically integrated, would crush the free-marketeers. That lean and mean mercantilist organization was, of course, the Soviet Union.

So, it's fun watching people on different political sides taking the same side when considering that question again. Hopefully, they'll keep each other very busy so as to not screw up (1).

Augustthegreat
Augustthegreat

tRump and cohorts are doing everything against China and Chinese private companies, because deep in his heart he thinks that America and American Companies can no longer compete with Chinese companies. First he uses U.S. government power to kill Huawei for 5G where USA has fallen behind; now Tic-Tok which beats Facebook, Instagram, and Youtube among young generations for social media.

Where is due process for such a governmental intervention? This mad orange gargantuan really thinks and behaves as if he is the King of the World. Is the U.S. political system still working? How longer will american people tolerate such a mad dog to govern them?

Jirka
Jirka

Nationalizing assets or businesses is a crime that communist regimes typically do at the beginning of their existence. It is sad that the US has embarked on this trajectory. China will have to require a mammoth compensation for this act of arbitrariness, which violates the basic property rights recognized in any civilized society

Soft_coding
Soft_coding

If anyone wants to win the election and energize a new generation of voters, you can steal this slogan: “I’ll unban TikTok”

Casual_Observer
Casual_Observer

Trump is an oligarch. He thinks he is Putin.

ToInfinityandBeyond
ToInfinityandBeyond

I can only imagine Trump’s outrage and screams if a sitting US President attempted to impose a percentage cut on one of his business deals.

Tony Bennett
Tony Bennett

"Telling business owners they have to pay the government a slice of any deal or the government will not allow it is blatantly unconstitutional."

...

Wait, what? ... forgive me I just finished watching The Godfather trilogy ...

LawrenceBird
LawrenceBird

Just call him the Extortionist in Chief

PecuniaNonOlet
PecuniaNonOlet

Where are all the freedom loving trump supporters rationalizing his quasi communist socialist actions?

Remember Trumpers, it is never too late to do the right thing.

Bungalow Bill
Bungalow Bill

As the United States government continues to infringe upon your privacy rights using digital communications...

See Snowden.

RayLopez
RayLopez

Actually the USA getting a slice of every foreign deal is common in politics involving foreign companies, and not unconstitutional. Recall Nissan, Toyota, BMW etc had to agree to set up USA based auto plants in the 1980s before being allowed to sell more cars here. TikTok's sellers agreeing to give a slice to the US government is not that different. I'm against all such concessions, but it doesn't make them illegal.

Doug Meyers
Doug Meyers

Unconstitutional Mr. Shedlock? I think NOT. The POTUS has the Legal Obligation to protect U.S. Citizens from Enemies both Foreign & Domestic. CCP China runs ByteDance which owns TikTok & WeChat.

Need I say more Mr. Shedlock?


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