Trump To Move Soon Against TikTok And 'countless' Other Chinese Software Companies Operating In The US, Pompeo Says

Pompeo says Trump will move against Chinese tech threats 'in the coming days' Treasury Secretary Mnuchin says TikTok will need to be sold or blocked in the US; Microsoft to continue talks to buy company from China's ByteDance
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Trump To Move Soon Against TikTok And 'countless' Other Chinese Software Companies Operating In The US, Pompeo Says

US President Donald Trump will take action against TikTok, WeChat and "countless" Chinese software companies that pose a national security threat to America, US Secretary of State Mike Pompeo said on Sunday, apparently widening the scope of attention the US government is paying to online tech platforms developed in China.

"These Chinese software companies doing business with the United States, whether it's TikTok or WeChat, there are countless more … are feeding data directly to the Chinese Communist Party their national security apparatus," Pompeo said in a Fox News interview. "It could be their facial recognition pattern, it could be information about their residence, their phone numbers, their friends who they're connected to."

"Those are the issues President Trump's made clear we're going to take care of," Pompeo said. "He will take action in the coming days with respect to a broad array of national security risks that are presented by software connected to the Chinese Communist Party."

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Focusing on TikTok specifically, US Treasury Secretary Steven Mnuchin, whose department is overseeing a national security review of the company, said on Sunday that the company will need to be blocked in the US or sold to another company.

All members of the Committee on Foreign Investment in the United States (CFIUS), an inter-agency review body housed within the Treasury Department agree that TikTok, which is owned by Chinese internet giant ByteDance, "cannot stay in the current format because it risks, sending back information on 100 million Americans", Mnuchin said in an ABC interview.

CFIUS reviews foreign acquisitions of US companies to ensure such transactions do not create national security risks. The body's mandate was broadened two years ago in response to concerns about China, which gave it the authority to review acquisitions retroactively. ByteDance acquired US social media app Musical.ly in 2017 for US$1 billion, and rebranded it to form TikTok.

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The mobile platform, which lets users create and share 15 second videos with custom music clips, has built a huge user base in the US, particularly within younger age brackets.

Mnuchin added that he had spoken with Chuck Schumer, the most senior Democrat in the Senate, and House Speaker Nancy Pelosi, also a Democrat, about the issue and that they all agree that a sale or a block on the site would be necessary, using the authority of International Emergency Economic Powers Act, if needed.

Responding to the drumbeat of comments about TikTok over the past week, the company's general manager for US operations, Vanessa Pappas, told users on Saturday that the company was working to give them "the safest app" and that "We're not planning on going anywhere".

US Treasury Secretary Steven Mnuchin. Photo: Bloomberg

US Treasury Secretary Steven Mnuchin. Photo: Bloomberg

The comments by Trump's cabinet members follow a series of reports over a possible sale of TikTok by ByteDance, which operates a similar short-form video platform in China called Douyin. ByteDance is backed by domestic and international investors including SoftBank Group, Sequoia Capital, General Atlantic and Yunfeng Capital.

On Saturday, Reuters reported that ByteDance had agreed to divest TikTok's US operations and Microsoft was lined up to take over, citing two sources.

The Wall Street Journal, citing a person familiar with the matter, reported shortly afterwards that Microsoft had paused negotiations after Trump said he opposed the deal, but Reuters reported on Sunday that the discussions were continuing.

Microsoft was seeking to conclude the negotiations by September 15, according to a statement from the company made following a conversation between CEO Satya Nadella and Trump. The company added that it would ensure all private data from TikTok's American users is transferred to and remains in the United States.

"Microsoft fully appreciates the importance of addressing the president's concerns. It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury," the statement said.

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The company added that there was no certainty a deal would be reached.

Reuters, quoting two people familiar with the matter, said the president had agreed to give ByteDance 45 days to negotiate the sale to Microsoft.

ByteDance, Microsoft and the White House did not immediately respond to requests for comment.

A source who was briefed on the discussions had earlier told the South China Morning Post that ByteDance founder Zhang Yiming and investors were reluctant to sell to the US company.

Additional reporting by Reuters

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