Tension between the U.S. and China has been rising over a wide variety of areas from U.S. tariffs on imports, to the handling of the Covid pandemic, to China's relations with Russia, its human rights violation and Taiwan's autonomy.
Now it's gotten to the point that President Joe Bidden has issued an ultimatum over a technology company that's effectively the same as one made by the man he defeated for the presidency in 2020.
DON'T MISS: U.S. May Ban TikTok
The owners of Chinese company ByteDance Ltd. must divest their stakes in social media video app TikTok or it may be banned in the U.S., the federal government said, according to the Wall Street Journal.
"TikTok executives have said that 60% of ByteDance shares are owned by global investors, 20% by employees and 20% by its founders, though the founders’ shares carry outsize voting rights, as is common with tech companies," the Journal reported.
In the past few years, TikTok has been under increasing scrutiny for suspicion about the company's ties to the Chinese government and concern over what exactly it does with data it collects, such as location and content preferences it is able to compile from its users.
TikTok Says Sale Wouldn't Help
Any security risk would not be reduced by a required sale, TikTok said.
"If protecting national security is the objective, divestment doesn’t solve the problem: a change in ownership would not impose any new restrictions on data flows or access," TikTok spokeswoman Brooke Oberwetter said in a statement, the Journal reported.
This policy stance from Biden and his administration puts him in a rare position: in agreement with former President Donald Trump.
Receive full access to real-time market analysis along with stock, commodities, and options trading recommendations. Sign up for Real Money Pro now.
Citing national security concerns in the summer of 2020, Trump sought to ban TikTok from use across the United States if it wasn't sold to a U.S. entity. Trump issued an executive order that August effectively announcing that TikTok was facing an imminent ban in the U.S.
A Federal judge blocked Trump's order at the end of the year. A plan to sell TikTok's U.S. operations to Oracle and Walmart was put on hold by the Biden administration early in 2021 but and was eventually shelved.
Now, however, TikTok has been banned from Federal Government issued phones and devices amid bipartisan concern over the potential misuse of data from the highly popular app by Chinese authorities.
