⏰📱 Time May Be Ticking for TikTok in the U.S.
Happy Wednesday before Christmas!
My family doesn’t really celebrate Christmas. We used to when I was a kid, but when my parents separated we discontinued the tradition. Sometimes we’ll still give a gift here and there in the family during Christmas, but in general, I don’t have any Christmas traditions.
I’ve been going to friends’ houses since I was a teen for Christmas Eve and Christmas Day, and that usually means I partake in other peoples’ traditions, which has been quite fun. One tradition I love is dinner on Christmas day. My friend’s mom makes these thin sugar cookies that I absolutely devour - she even makes me a to-go bag of cookies! So, whichever holiday you celebrate this season - I hope it’s a great one :)
This week, we look further into the ban that lawmakers in the U.S. proposed that would outlaw TikTok on government devices. If you recall, this isn’t the first time that TikTok has faced scrutiny in the White House but it seems that time is ticking for TikTok to resolve its security issues in the U.S. before the app may be banned outright.
Enjoy this week’s Hump Days!
- Humphrey, Rickie & Tim
Featured Story
In 2020, uncertainty swept the social media world as thousands of creators who gained massive followings on TikTok during the pandemic faced the possibility that the app would be banned. Donald Trump had attempted to block new users from downloading TikTok unless its parent company, Bytedance, sold the app to a U.S.-based firm. Meta, Microsoft, and Oracle were among the prospective buyers. The push eventually lost a series of court battles, however, the negative sentiment from the White House stuck around.
On Tuesday, U.S. lawmakers included a proposal to bar federal government employees from using TikTok on government-owned devices as part of a larger, key spending bill. The bill that is expected to be voted on this week gives the White House 60 days ‘to develop standards and guidelines for executive agencies requiring the removal’ of TikTok from federal devices.
On Monday, state agencies in Louisiana and West Virginia were the latest to participate in the ban of TikTok on government devices, joining the likes of 17 other states and many federal agencies including the White House, the Department of Defense, and Homeland Security. The concern is that China could use the data collected to track Americans and censor content.
As discussed earlier, this is not the first time that federal government officials are coming after TikTok but it may be the most serious. The FBI’s director called TikTok a national security threat and an FCC commissioner has asked Apple and Google to remove the platform from their app stores altogether. In addition, the House of Representatives’ chief administrative officer issued a ‘cyber advisory’ against the platform due to security and privacy concerns.
The Biden administration, in line with a national tough-on-China agenda, negotiated with TikTok earlier in September to work out a policy that would require the app to store American user data on stateside servers, delegate oversight of TikTok feed algorithm to Oracle, and convene a board of security experts who would ensure compliance. However, the deal has not gone into effect, seemingly because many decision-makers do not believe these measures go far enough, and instead want ByteDance to sell TikTok to a U.S. company.
TikTok representatives have said the concerns are largely fueled by misinformation, and that they are “disappointed that so many states are jumping on the political bandwagon to enact policies based on unfounded falsehoods about TikTok that will do nothing to advance the national security of the United States.”
While TikTok continues to deny any wrongdoing, other countries such as the United Kingdom are also pursuing investigations into the app’s data practices and Taiwan is currently investigating TikTok for suspected illegal operations (i.e., setting up a subsidiary in Taiwan to influence politics and the democratic process). TikTok is at risk of losing its largest user base in the U.S., and along with it, a lot of cultural influence. If they want to maintain the U.S. market, they need to start taking negotiations more seriously.
Weekly News Roundup
U.S. Poised to Become Net Exporter of Crude Oil in 2023 (Reuters)
Sales of U.S. crude to other nations are now a record 3.4M barrels per day (bpd) and the United States is also the leading liquefied natural gas (LNG) exporter, where growth is expected to soar in coming years. Factoring into the equation this year include sanctions hurting Russia’s exports of oil and natural gas, and Washington’s massive release of oil from emergency reserves to combat spiking gasoline prices. The U.S. already produces more oil than any other country in the world including Saudi Arabia and Russia, but also consumes the most oil in the world at 20M barrels of crude a day.
U.S. Lawmakers Include Ban on TikTok on Government Devices in Spending Proposal (Reuters)
In a key spending bill, U.S. lawmakers included a proposal early Tuesday to bar federal government employees from using Chinese app TikTok on government-owned devices. The ban is part of a larger measure to fund U.S. government operations that is expected to be voted on this week. The legislation would not impact the more than 100M Americans who use TikTok on private or company-owned devices. Many federal agencies, including the White House and the Defense, Homeland Security, have concerns that China could use it to track Americans and censor content.
Blackstone’s Real Estate Fund for Wealthy Prompts SEC Queries, Investor Scrutiny (Bloomberg)
The $68B Blackstone Real Estate Income Trust has been grappling with an increase in investors pulling money, particularly from Asia. This prompted the SEC to reach out to Blackstone as well as rival Starwood Real Estate Income Trust to understand the market impact and how the firms would meet redemptions. The increase in withdrawal requests draws attention to the complexity of highly illiquid assets and the limits associated that ease pressure on managers, making it less likely they’ll have to quickly sell assets when investors get jittery. The SEC inquiries aren’t any indication that either firm is under investigation or committed any wrongdoing.
Chart of the Week
Using data going back to 1970, once inflation exceeds 8.0%, it’s reasonable to expect a decade before inflation goes back to 3.0%. While the economy is constantly changing, the fact that inflation topped 8% and will get back to 3% in barely 12 months looks far-fetched.