Yesterday, the US House of Representatives overwhelmingly passed a Bill dubbed the “Protecting Americans From Foreign Adversary Controlled Applications Act,” that would give ByteDance about six months to divest the US assets of TikTok or face a ban. 

What does this mean for TikTok? Join us on the latest episode of the Impulso Podcast as we delve into: 

  • The likelihood of the ban; 
  • TikTok’s options – there seem to be no good options;
  • Donald Trump’s opposition to the ban – will he really stand against it?;
  • Will other countries follow suit?

Tune into the full episode here:

Featured materials: 

[Event Deck] Indonesia after the TikTok Shop ban, Momentum Works 

E44: The winners and losers of the TikTok-GoTo deal, The Impulso Podcast 

[AI-generated transcript] 


[00:00:00] Sabrina: Hello everyone and welcome to episode 66 of the Impulso Podcast. So yesterday, the US House of Representatives overwhelmingly passed a bill dubbed the Protecting Americans from Foreign Adversary Controlled Applications Act, which would give ByteDance about six months to divest its US assets of TikTok or face a ban.

So of course, this doesn’t mean that TikTok is banned now. The Senate still needs to review and pass it. And then , the bill has to be signed by the president of the United States as well. So, Jianggan, what do you think about this potential ban of TikTok shop?

[00:00:35] Jianggan: I think when the bill was first raised a few weeks ago and a lot of people around us were saying, Oh, okay, this is the, it’s not another attempt for the U. S. legislators to Bash TikTok, but we have seen many of such attempts in the past, right? I mean, it takes a long time and then it goes into the legal process and it never comes out as a result.

 So many people think that it was just a grandstanding of of US politicians, especially when the elections are coming. But I think I think very soon people realize that this time was more serious than previously. So the, The bill was, was structured in that way, in a way that it was not actually banning TikTok, but it was forcing Bytedance to divest TikTok in the U. S. And And also also the speed that it goes to the House of Representatives and also Biden saying that, okay, he will sign the bill if it goes to his table. It shows that there is some concerted effort behind it. So, so I think this time is actually quite serious. 

[00:01:38] Sabrina: And I think TikTok realizes that it’s quite serious as well, right?

They’ve sent, they’ve told their users to go and call their local governments and all to prevent this ban from happening. 

[00:01:49] Jianggan: Yeah. I mean, the U. S. is democracy, right? So TikTok sent a notification to a large cohort of U. S. user base for them to call their elected representatives, Mr. Congressmen and senators.

To to voice their concerns and I don’t think they have sent that to all. It’s 170 million users in the U. S. but but but from the news reports, you can see that many of many of the Legislators in the capital here complain about I mean their phone lines being jammed by people calling them. I I think that episode showed first, I think TikTok realized how severe this time was.

So it took some drastic actions. And second, this drastic action was risky because because that might fall into the exact concern people have about TikTok. Sorry about TikTok, right? I mean, it has the ability to mobilize hundreds of thousands of people, if not millions of people in the U S and and it’s not controlled by The us interests so so of course they will see this as a as a big threat 

[00:02:53] Sabrina: So what do you think tiktok would do in this? I mean currently we see that they are trying to prevent this bill from being passed, right? But do you think it’s likely that byte dance would look to divest tiktok? 

[00:03:06] Jianggan: I think between now and and at the time that I mean if this bill passes senate, which I think there’ll be some debate but it’s likely going to pass And if Biden signs it after he passes the Senate, which Biden says he will do, so TikTok would have a time window for them to, to make a decision.

So I think until that happens they will probably lobby very intensively. But I don’t think how, I’m not sure how effective this lobbying efforts would be, right? Because now bashing TikTok, bashing Chinese controlled apps. It’s it’s almost like a consensus across the capital. So it’s very hard for, for any legislator to stick their head out saying that I support TikTok.

So, so lobbying, I think would be quite hard. And if push comes to the shove, and if People’s really faced with a binary choice, right? Either divest that to somebody else or or face the ban in a sense that, okay. App stores in us would not be able to carry them. Maybe cloud service providers in us would not be able to work with them.

I think they will probably have to choose the latter. Because because that still leaves them some options in the future. And also, also the divestiture would open a lot of complications. I think with the government in China as well. 

[00:04:21] Sabrina: So it seems like if the ban were to be passed, TikTok doesn’t really have any good options of what they can do, right?

[00:04:28] Jianggan: I think I think last year when Indonesia banned TikTok shop some people saying that okay so is that the doom? And I think at that time, I was saying that TikTok shop would find a way to go back to Indonesia sooner or later. And they struck a very, very good deal with Tokopedia to come back to Indonesia.

I think with the U. S. it’s a little bit different because because Indonesia it’s still a neutral country between China and the U. S. And the U. S. sees China as a big adversary. I mean, that’s what’s written in the bill, right? So so I don’t see them having any good option this time around. So maybe there’s something being worked being worked on behind the scenes that we’re not aware of, but but from the outside, you really don’t see them having any good options.

[00:05:08] Sabrina: And I think another interesting thing about this ban is that Donald Trump, who was many years ago actually suggested a ban on TikTok shop seems to be opposing the ban this time round. Right? So he came out saying that he said there are a lot of people on TikTok that love it. There are a lot of young kids on TikTok who will go crazy without it\ and he says that without TikTok, you can make Facebook bigger and he considers Facebook to be an enemy of the people. 

[00:05:34] Jianggan: Facebook is definitely an enemy of Donald Trump, right? Because they banned Trump. They banned him, yeah. Yeah. So, so after all this this hoo ha after the previous election. So, so definitely I don’t think that Donald Trump likes Facebook or Mark Zuckerberg for that matter.

But the question is that would he actually do anything tangible to stop this motion, right? I mean, I don’t think he was the case head to say that, oh, please don’t ban TikTok. And I think he’s just was in his his so called concerns to, to gain some political capital. Because if you think about that, I mean, most of the users on TikTok in the US are young people and many of them support Democrats.

And I think that Donald Trump would see this as a good opportunity to, to, to tell these people saying that, Hey, you are supporting the wrong people. I’m, I’m for the people, I’m for the people of US. I’m supporting your freedom. I’m, I’m doing the right thing for you. But would he actually go against the consensus in the US politics at the moment?

I don’t think he will.

[00:06:40] Sabrina: I think, yeah. I mean, everyone seems to be very, supportive of this ban. I think the bill passed about 350, 350 people

[00:06:51] Jianggan: I think it was a large majority. Yes. I think it was bipartisan as well. , so I think on people’s side, I, I do think that for the last few years their effort in the U. S. has been. Trying very hard to comply, trying very hard to lobby, and using the playbook that has worked in the U. S. But but TikTok at the end of the day is not a company that the U. S. politicians would trust because no matter, I mean, so this, this traditional Chinese saying called which means that if you want to accuse somebody of something, you can always find an excuse.

So, so key here is intention. And, and when the U. S. doesn’t trust you, and when you have such a nuclear weapon that, that you, you, you control, I mean, The screen time and the news and the content that hundreds of millions of people consume on a daily basis. And of course they are suspicious. So it’s very hard for you to just clarify, just tell people that you are doing the right thing.

I do think that I do think that if you use conventional means to lobby, you will probably not go very far.

[00:08:00] Sabrina: So do you think other countries would copy this? When we talked about the TikTok shop ban in Indonesia, something we mentioned is that we might see a domino effect in other countries. So similarly for this, if US well to ban TikTok, do you think we would see other countries following the ban?

[00:08:18] Jianggan: I think there are other countries, or I would say that there are other political forces in different countries who have concerns with TikTok. Who don’t like to talk shop for whatever reason, right after the, the, the ban of the TikTok shop in Indonesia last October, and you do see that the government’s in, I think government officials in places like Vietnam and Malaysia coming out to address some of the concerns that some people have raised in their country.

And and I do think that some countries might consider some actions similar to what the U S has done, but I doubt whether that will form a domino because. Because now there’s this great China US rivalry, right? I mean, I think most countries would probably choose not to take any side. So people would probably step up their sort of regulations and, and and supervisory actions against the content on TikTok.

But I don’t think that most countries would choose the outright ban because that would make them in a very difficult position, especially when it comes to the Chinese government. By the way, I do think the Chinese government is concerned about the Douyin, the default Chinese customer, as well, to a certain extent, because, because You don’t know because everything is controlled by an algorithm, right?

You don’t know how what kind of content people are consuming on a daily basis and probably tiktok doesn’t know as well So that obviously in any country would pose a risk because you don’t know what your people are subject to you don’t know what kind of information they are consuming You don’t know how their opinions and how their perspective are shaped by this content.

So so I think I think Every government is probably right to be concerned But I mean, how should you deal with this concern? How do you work with Tiktok to actually elevate some of these concerns? It’s probably more important, right? 

[00:10:11] Sabrina: Yeah, I think that’s and of course I mean, Tiktok has shown that they are willing to, to a certain extent, work with the governments to try to improve their Algorithms or the search functions on their app.

[00:10:23] Jianggan: Yeah, I think I think they are very willing to because at the end of the day I mean knowing tiktok they just want to be simple businesses, right? I don’t want to get into politics, but But since as a tool as a social media tool has become so powerful And and people don’t see them this way. So that’s also a Not really a lesson, but a continuum of lessons that that TikTok leadership or ByteDance leadership are learning and are trying to adapt their organizations and are trying to navigate through.

So it’s, it’s not easy. And the long term consequences we don’t know yet. So, so for instance if TikTok is banned in the U. S., then TikTok shop in the U. S. would have no medium to, to actually conduct business. And they are doing like dozens of millions of dollars of GMV every day. So when that happens, does that mean that they will refocus their effort on Southeast Asia and which will become bad news for Shakti?

And or does it mean, does it mean that they will, I don’t, I don’t know. I mean, does that mean that, okay, Temu will benefit from, from this, right? And with, with the U. S. operations, or will Temu become a target of U. S. politicians as well? So, so there, there are many things which which are uncertain at this juncture. And especially with the elections coming in the U. S. 

[00:11:38] Sabrina: Yeah, I think especially as we , gear up to the elections a lot of, a lot of things are happening and a lot of things will be happening even after the elections, so it will be interesting to keep an eye on all these companies. 

[00:11:51] Jianggan: Yeah let’s see and I mean of course, I mean, the other thing is that China also bans Facebook and other apps. So maybe, maybe at the end of the day, they will score even and Facebook and other companies would find it okay to operate without China. Maybe people would find it okay to operate without the US. They are already good to operate without India, right? 

[00:12:14] Sabrina: So maybe they will, I mean, they’ll figure it out. These, they’re smart people running these companies, right? They’ll find something to do. They’ll find a way to 

[00:12:25] Jianggan: Smart seasoned who have gone through a lot of challenges and I don’t think they will give up that easily. Yeah 

[00:12:31] Sabrina: So thank you guys for tuning in to another episode of the impulsor podcast We hope that you guys enjoyed today’s episode And if you did do like our podcast and follow us on spotify apple podcast or your preferred podcast platform To stay up to date on the latest happenings and trends in tech new retail and the broader digital economy 

[00:12:47] Jianggan: And that is Sabrina signing off from Shenzhen, right?

[00:12:51] Sabrina: Yeah, signing off from Shenzhen because next week we’re starting our live commerce immersion.

[00:12:55] Jianggan: Okay, stay tuned for more updates for that. Yeah. Yes. 

[00:12:59] Sabrina: Bye. Bye. 

[00:13:00] Jianggan: Bye

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].