Forced Sale or Ban of TikTok Needed, Committee Leaders Say
The House Select Committee on China's chairman and ranking member acknowledged that momentum for legislation on TikTok has dissipated, but Chairman Mike Gallagher, R-Wis., said that behind the scenes he and others are working on "compromise language that will avoid some of the pitfalls of the Senate's approach, which a lot of people on my side felt was too broad ... which still does what we want it to do, which is ban [TikTok] or force a sale."
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Gallagher and ranking member Raja Krishnamoorthi, D-Ill., speaking at a Q&A last week hosted by Punchbowl News, said that mitigation -- such as the promise that TikTok will keep American users' data in a U.S. subsidiary (see 2303230038) -- is not sufficient.
Krishnamoorthi added that the administration is asking Congress to pass legislation to enhance the authorities of the Committee on Foreign Investment in the U.S., or CFIUS. He said there's a broken process at CFIUS, and that the committee is stalemated on how to handle TikTok, which is headquartered in Singapore but is owned by China's ByteDance.
"We can't allow a company that's owned by ByteDance, which is effectively controlled by the [Chinese Communist Party], to become the dominant media platform in America," Gallagher said. "It just makes absolutely no sense from a national security perspective."
Gallagher said he doesn't know if Congress will be able to pass TikTok legislation this year, but that even with aggressive lobbying by TikTok and turf wars in Congress, he is "still cautiously optimistic" a bipartisan compromise can be found.
Krishnamoorthi complained that China has been successful in playing the U.S. and its allies off each other, punishing one country's firm and favoring another. He said that Airbus and Boeing had agreed that they would not "give away our secrets to building our airplanes" as they open factories in China. The U.S. dropped its World Trade Organization-authorized tariffs on EU goods in 2021, but said a permanent end to the Airbus-Boeing dispute is predicated both on a permanent agreement on subsidies and on agreement to protect their industries from Chinese competition that they say is a result of oversubsidization and other trade abuses (see 2106150021)
"That agreement lasted all of 10 seconds," Krishnamoorthi complained, saying he knows that Airbus agreed to more technology transfer when it established a second facility in China. He said that as a result, a Chinese civil aircraft manufacturer will eventually drive out Airbus and Boeing from its market and compete with the aircraft manufacturers around the globe.
Moderator Anna Palmer asked Gallagher what the private sector should be doing to deal with vulnerabilities that the economic entanglement between the U.S. and China causes. Gallagher said one thing he hopes the private sector could agree with him on is that there should be no U.S. investment -- passive or active -- in war-adjacent products or in technology that fuels China's surveillance state.
He said such a restriction on capital is "harder to do in practice, I admit that."