China's Long Game: How TikTok Marks a Move in the Tech Cold War
While the forced divestment of TikTok feels like a win for the US, with President Biden signing the foreign aid package that included the provision, it might be a short-sighted victory in the larger technological cold war with China.
Former Secretary of State Henry Kissinger's "Détente" strategy, focused on deterrence to prevent a full-blown US-Soviet war in the 1970s, offers valuable lessons. As Niall Ferguson argued in his Council on Foreign Relations essay, "Kissinger and the True Meaning of Détente," Kissinger, before his death, warned of a "new cold war" more dangerous due to technological advancements. While he likely focused on weapons and artificial intelligence, his words resonate with how tech companies are becoming pawns sacrificed in this modern cold war.
The divestment legislation, giving ByteDance nearly a year to find a US owner or face a ban, is just another move in this ongoing chess game. Last week, Apple, due to its "special" relationship with China, removed Meta's WhatsApp and Threads from its App Store at the CCP's request.
By May 2025, if ByteDance fails to find a buyer, Apple and Google might be forced to remove the app or restrict updates, effectively banning it in the US.
The Fallout: Legal Battles, Platform Shifts, and Economic Ramifications
This potential ban will likely trigger several consequences:
Legal Challenges: ByteDance might challenge the ban in the Supreme Court, arguing it violates First Amendment rights.
Investor Scramble: Potential investors will assess the situation, with TikTok's market cap and pricing impacted by access to its algorithm and user data.
Platform Migration: Meta will likely launch campaigns to entice TikTok users to migrate to Instagram's Reels feature.
Marketing Shifts: Global advertisers will need to adjust their strategies if TikTok is banned. Politicians will also have to decide on campaigning on the platform.
A crucial, yet under-discussed, risk is the impact on the US economy. The thriving content creator economy on TikTok would be forced back to Meta platforms, which are still playing catch-up. While Reels are profitable, TikTok's superior algorithm reigns supreme. Does Meta have the infrastructure to accommodate this influx of creators seeking a new home?
Beyond TikTok: The Looming AI Battleground
The ban wouldn't just affect TikTok. ByteDance, similar to Meta, has a pipeline of unreleased applications, some potentially in the AI and autonomous intelligence space. If these products are launched outside the US, the US loses access to the data and expertise that come with those launches. This creates a situation where Meta and its apps are banned in China, while ByteDance and other Chinese tech companies face similar bans in the US.
Détente or Escalation: The Need for a National Conversation
The lack of federal privacy legislation is a root cause of this situation. Had such legislation existed, national security concerns surrounding US user data could have been addressed before TikTok's rise. Now, we question how many chess pieces we have left before reaching Détente with China, all because the US couldn't establish federal privacy laws.
The Taiwan Question: A Broader Geopolitical Impact
The implications of this tech cold war extend beyond economic concerns. We must also consider the impact on Taiwan, a crucial geopolitical flashpoint.
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Additional Resources on this topic:
Decoder with Nilay Patel: Why the TikTok ban won’t solve the US’s online privacy problems https://www.theverge.com/2024/4/25/24140320/why-the-tiktok-ban-wont-sol…
Pivot: TikTok Ban Approaches, China’s App Crackdown, and Guest Dana Mattioli https://open.spotify.com/episode/6gpwXDzL6sByHH4B98nFjY
Foreign Affairs: Kissinger and the True Meaning of Détente https://www.foreignaffairs.com/united-states/kissinger-and-true-meaning…
Senate Passes TikTok ban bill, sending it to President Biden’s desk https://www.theverge.com/2024/4/23/24137638/senate-passes-tiktok-ban-bi…
Is 2024 the Year US-China Tensions Finally Trip up Apple? https://www.bloomberg.com/news/articles/2024-01-03/us-china-tensions-po…
April 25, 2024