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Trump Approves TikTok Deal

The Wall Street Journal reports Trump Signs Off on TikTok Deal With Oracle, Walmart.

President Trump said he has agreed in concept to a deal under which Chinese-owned video-sharing app TikTok will partner with Oracle Corp. and Walmart Inc. to become a U.S.-based company, capping negotiations that have stirred debate over national security and the future of the internet.

“I have given the deal my blessing, if they get it done that’s OK too, if they don’t that’s fine too,” Mr. Trump told reporters at the White House on Saturday. 

With the announcement of a deal, the Commerce Department said it would delay a ban on U.S. downloads and updates for the TikTok app that was set to take effect at 11:59 p.m. Sunday. The ban is now set to take effect Sept. 27, but could be further delayed or removed if the proposed new partnership goes forward.

Deal Terms and Ownership

  • Oracle will take a 12.5% stake in the new entity called TikTok Global, and would provide secure cloud service.
  • Walmart will purchase 7.5% of TikTok Global and will provide e-commerce, fulfillment, payments and other services to the new company.
  • TikTok’s current owner, Beijing-based ByteDance Ltd., would retain roughly 80% ownership of the company, according to people familiar with the situation. But because ByteDance is about 40% owned by U.S. investors, the new company with equity stakes for Oracle and Walmart can be described as having majority American ownership, they said.

WeChat Ban Halted on Freedom of Speech Concerns

US Magistrate Judge Laurel Beeler Sided With WeChat on grounds of freedom of speech.

Beeler entered an order Sunday for a preliminary injunction blocking the federal ban on U.S. downloads and other functions from going into force as scheduled for 11:59 p.m. Sunday.

In her 22-page order, Judge Beeler agreed with free-speech arguments raised by the user groups, saying she is convinced that “there are no viable substitute platforms or apps for the Chinese-speaking and Chinese-American community.” 

“WeChat is effectively the only means of communication for many in the community, not only because China bans other apps, but also because Chinese speakers with limited English proficiency have no options other than WeChat,” she said in the order.

The mobile app, which has 19 million regular users in the U.S. and more than 1.2 billion users world-wide, enables users to send messages, make phone calls and transfer money. It also functions as a social-media platform and is widely used by companies in China—including U.S. companies operating there—for business communications and marketing.

US Security Threat Claim

The BBC notes Trump's security claim. 

The US Department of Commerce Secretary Wilbur Ross said in a statement that the decision to block the app was taken "to combat China's malicious collection of American citizens' personal data".

The department said WeChat collected "vast swathes of data from users, including network activity, location data, and browsing and search histories".

WeChat's Claim

WeChat insists encryption means others cannot "snoop" on your messages, and that content such as text, audio and images are not stored on its servers - and are deleted once all intended recipients have read them.

The Evidence?

If there is any evidence to support Trump's claim, can we please see it?

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If not, this is best considered as nothing but another Trump power play on China.

Recall that Trump labeled imports of cars from the EU a security threat. 

Boy Cries Wolf

After that ridiculopus security threat charge regarding autos, there is not a single claim Trump or his administration makes that can be trusted at face value. 

That is what happens when you cry "wolf" when there isn't a wolf around for a thousand square miles.

A similar thing happened with Huawei, China's 5G technology company. Trump labeled it a security threat then stated he would negotiate on Huawei if China would buy more soybeans. 

Please see Where national security meets Trump’s transactional worldview.

The most damaging element of the episode is the president’s transactional response to a highly critical national security issue. He directly tied Huawei’s fate to the final outcome of the US-China trade negotiations — and further underscored his limited, and willfully superficial, view of the gravity of the Huawei challenge by noting defensively that US farmers will benefit hugely from the trade truce and by a future trade deal. 

Either this is outright crazy or Huawei was not really a security threat.

Since then, Trump has tried to block Huawei at every turn. There was no phase II deal.

Decoupling Madness

No one should take any of Trump's claims seriously nor trust any deal he makes. 

This is all about Trump's intent to decouple from China. And that idea is absurd.

For discussion, please see Trump Promotes Decoupling From China With No Clue as to How It Can Work