U.S. to Act on China Software Beyond TikTok, Pompeo Says

Written by
Tony Czuczka
Written by

Tony Czuczka

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(Bloomberg) -- The Trump administration will announce measures shortly against “a broad array” of Chinese-owned software deemed to pose national-security risks, U.S. Secretary of State Michael Pompeo said.

The comments suggest a possible widening of U.S. measures beyond TikTok, the popular music-video app owned by ByteDance Ltd., one of China's biggest tech companies. President Donald Trump told reporters Friday that he plans to ban TikTok from the U.S., but his decision hasn't been announced. Pompeo signaled he expects a Trump announcement “shortly.” Chinese newspapers slammed a potential ban on TikTok.

The president continues to weigh his options and may have an answer Monday or Tuesday, Fox Business reported on Sunday evening.

Trump's decision has implications for Microsoft Corp., which has been exploring an acquisition of the app from ByteDance. Microsoft Chief Executive Officer Satya Nadella spoke with Trump on Sunday to salvage the company's effort to buy TikTok's operations in the U.S. and several other countries.

Microsoft Tries To Salvage Deal To Buy TikTok, Appease Trump

Talks to buy the music video app would seek a resolution “in a matter of weeks” and look to be completed no later than Sept. 15, Microsoft said in a statement. The company will continue to engage Trump and the U.S. government, adding that “Microsoft fully appreciates the importance of addressing the president's concerns.”

“If the company & data can be purchased & secured by a trusted U.S. company that would be a positive & acceptable outcome,” Senator Marco Rubio of Florida said on Twitter. Senator Lindsey Graham of South Carolina, a Trump confidant, tweeted that he understands the concerns of TikTok fans and users and that Microsoft taking over would be a “win-win.”

Senators John Cornyn of Texas and Roger Wicker of Mississippi made similar comments, although Wicker also urged “tight security measures” to protect consumer data.

Chinese software companies doing business in the U.S. are feeding data directly to Chinese authorities “whether it's TikTok or WeChat -- there are countless more,” Pompeo, on of the Trump administraton's China hawks, said on Fox News Channel's “Sunday Morning Futures.”

Trump “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,” Pompeo said.

Trump can either “force a sale” of TikTok or block the app by executive order, Treasury Secretary Steven Mnuchin said on ABC's “This Week,” adding that he wouldn't discuss specifics on his talks with the president on the topic.

CFIUS Objections

Mnuchin, who heads the Committee on Foreign Investment on the United States, or CFIUS, said “the entire committee agrees that TikTok cannot stay in the current format because it risks sending back information on 100 million Americans.”

That view that “there has to be a change “ is shared by lawmakers including House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer, Mnuchin said.

TikTok has become one of the world's most popular apps. It's been downloaded more than 2 billion times globally and more than 165 million times in the U.S. ByteDance is prepared to sell 100% of TikTok's U.S. operations as a way to head off a ban by Trump, two people with knowledge of the situation said earlier.

TikTok has hired almost 1,000 people in the U.S. this year and will be employing another 10,000 into “great paying jobs” in the U.S., a company spokeswoman said in a statement. The business's $1 billion creator fund also supports people in the country who are building livelihoods from the platform, she added.

“TikTok U.S. user data is stored in the U.S., with strict controls on employee access,” she said. “TikTok's biggest investors come from the U.S. We are committed to protecting our users' privacy and safety.”

Chinese state media defended TikTok, characterizing the Trump administration's antagonism toward the company in a similar fashion to U.S. politicians' attitude toward the Chinese global networking giant Huawei Technologies Co. Ltd.

The China Daily wrote in an editorial on Sunday that “although the Oval Office claims to oppose authoritarianism, it has a penchant for arbitrarily demonstrating its own authority.”

And an editorial in the Global Times, one of China's most combative state-run papers, said that “the U.S. claim that TikTok threatens its own national security is purely hypothetical and unwarranted charge -- just like the groundless accusation that Huawei gathers intelligence for the Chinese government.”