U.S. TikTok Battle Could Push China Deeper Into Europe

Video app TikTok has joined Huawei on the U.S. list of Chinese technology deemed a threat to American national security, with President Donald Trump threatening to ban the app and Microsoft now seeking to purchase much of its operations from the ByteDance start-up.

The Trump administration has accused ByteDance of using the app—used by some 80 million users in the U.S. each month—to gather data on Americans and make it available to the Chinese Communist Party.

Secretary of State Mike Pompeo has previously characterized major Chinese corporations as "Trojan horses" for the CCP to gather intelligence and data from the U.S. for Beijing's benefit, a charge ByteDance has denied.

The U.S. pressure on ByteDance prompted angry condemnation from China, where regime officials and state media framed the campaign as a paranoid reaction to a challenge to U.S. technological supremacy. State media has threatened retaliation, though whether that means like-for-like attacks on U.S. businesses in China or something else remains unclear.

On Tuesday, the state-backed Global Times newspaper accused the Trump administration of "bullying" Chinese companies, leaving Beijing the choice between "submission or mortal combat in the tech realm." It added that China had "plenty of ways to respond if the administration carries out its planned smash and grab."

The newspaper—which often airs the more nationalistic sentiment from within the CCP—also urged Beijing to step away from the U.S. and look elsewhere for investment and growth. "China's opening-up to the outside world and disintegrating the U.S. decoupling strategy should be priorities," the editorial read.

The Trump administration has been trying to convince its Democratic allies to join its China decoupling campaign, leaning on European nations to exclude Huawei from nascent 5G networks, for example. It has met with mixed results, though the British decision to ban Huawei from its 5G infrastructure was celebrated as a major foreign policy win in Washington, D.C.

Microsoft has said it is in talks to buy TikTok's operations in the U.S., Canada, Australia, and New Zealand, but it is not clear what might happen to the app in Europe. Amid the U.S. dispute, reports this week indicated that the app may open a headquarters in London. ByteDance already employs 800 of its 1,000-person European workforce in the U.K. and Ireland.

British and French government spokespeople told Bloomberg that neither nation has plans to block ByteDance. An unnamed German government official, meanwhile, said the nation sees no security risks with the app and is not planning to ban TikTok.

Jue Wang, an associate fellow at the Chatham House think tank and an assistant professor at Leiden University Institute for Area Studies in the Netherlands, told Newsweek that the Trump administration's offensive against Chinese tech is prompting investors and companies to consider re-focusing on nations where they are less likely to be challenged.

The Chinese, she said, are discussing how to improve risk assessments for U.S. investments and be more careful about which politicians to talk and deal with. Rather than retaliation, she said, Chinese businesses are discussing how tech companies "can possibly pursue non-American markets as a possible alternative."

The Chinese are also considering ways to improve their own domestic market "and make it more transparent," Wang said, "so that maybe when the political situation changes in the future in the U.S. or in other Western countries, Chinese companies will still have opportunities."

Wang described the shift as "very interesting," though noted it remains to be seen how it will play out given the geopolitical challenges. "But I do see the Chinese are reacting rather positively, believing there might be another opportunity in Europe," she said.

US, CHina, Europe, TikTok, ByteDance, ban
This file photo shows the logo of social media app TikTok displayed on the screen of an iPhone in front of an American flag on August 3, 2020 in Arlington, Virginia. OLIVIER DOULIERY/AFP via Getty Images/Getty