Donald Trump: US Treasury should get cut of TikTok deal

Joanna Estrada
August 6, 2020

At the same time as his advisers are racing against the clock to strike a deal for its US assets, ByteDance's billionaire founder Zhang Yiming has penned his second letter to his employees in as many days, declaring Trump's real goal is not to save but to kill off TikTok.

As TikTok's experience shows, no matter how unfounded the claims against them are, as long as they remain Chinese companies, they will be presented as being a "Red threat" by the administration.

The U.S. assesses fees associated with deals under review by the Committee on Foreign Investment in the United States, or CFIUS, which investigates overseas acquisitions of U.S. businesses. Have an American company like Microsoft take over TikTok.

The President also reitarated Tuesday that the U.S. Treasury would have to get a cut of the deal, which is an unprecedented demand. But Opsahl noted that "TikTok is worth more" without pressure from the USA government.

US President Donald Trump reversed course on a plan to ban the app when American tech giant Microsoft announced plans to partially acquire TikTok's business.

USA officials see the social media app as a security threat because China's 2017 national security law states that "any organization or citizen shall support, assist, and cooperate with state intelligence work in accordance with the law, and maintain the secrecy of all knowledge of state intelligence work". In a commentary published by the Wall Street Journal, critics say Microsoft should reject Trump's demand, because it would set a risky precedent of seizing foreign investment through law enforcement departments, opening the door for other countries to treat American companies in the same way.

"I realised Microsoft will figure out a way to monetise better, which will lead to creators making more money, as well as Microsoft", he said. But a sale to a United States company is seen as a way to alleviate such concerns.

China, however, seems less willing to work with the US government.

U.S. Senate Democratic Leader Chuck Schumer also backed the sale, while a senior White House adviser raised concerns about a sale to Microsoft. "TikTok would immediately give Microsoft consumer content credibility while moving the company more squarely into Facebook's territory and thus opening up a potentially substantial advertising revenue stream", said Dan Romanoff, an equity research analyst at Morningstar. "Without a lease, the tenant has nothing - so they pay what's called key money, or they pay something".

His comments in a letter to ByteDance's Chinese employees on Tuesday came after the company and Zhang were heavily criticised on Chinese social media for entering into talks with Microsoft Corp to sell TikTok's United States operations.

Microsoft and ByteDance have given the US government a notice of intent to explore a preliminary proposal for Microsoft to purchase the TikTok service in the US, Canada, Australia, and New Zealand.

"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".

On Monday, Trump said the US government should get a "substantial portion" of the TikTok sales price.

"As a company, we have to abide by the laws of the markets where we operate", he said.

"Instead, I think this is part of the splintering of the Internet into competing national networks", Lemley said.

Dmitri Robinson, a 20-year-old TikTok user with more than 270,000 followers, said short-form video apps Triller and Byte are seen as the top two contenders for the next hottest app among conversations with friends and videos he has seen on TikTok.

He said he did not mind "whether it's Microsoft or somebody else - a big company, a secure company, very, very American company buy it".

Other reports by Click Lancashire

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