Sep 8, 2020 - Economy

What could happen if there is no TikTok deal

Illustration of a finger about to delete the TikTok app

Illustration: Sarah Grillo/Axios

President Trump's deadline for a TikTok deal is one week from today, as certainty continues to drain from the voices of sources close to the process. The big question now is what happens if no deal is struck.

Between the lines: One possibility is that Trump won't follow through on his threat. This could mean dropping the entire thing altogether, or perhaps saying the parties are close to an agreement but just need a bit more time. Maybe an extra 50 days or so, just to get Trump past Nov. 3.

  • This might depend on who gets into Trump's ear last. For example, former Trump campaign adviser David Urban has been working the White House on TikTok's behalf. Maybe he can sneak by Peter Navarro at 11:59 pm.

The more likely possibility is that Trump follows through, believing the (still questionable) national security rationale and that anti-China tech is a winning political message.

  • It's still unlikely TikTok would go offline next Wednesday, particularly given that it's already fighting Trump's executive order in court. Instead, expect this to become a protracted legal battle, reminiscent of the recording industry vs. Napster.
  • From an executive perspective, the White House would initially use the FTC, although could also leverage Treasury to pressure financial institutions doing business with TikTok. It also may ask Apple and Google to remove TikTok from app stores, although it unlikely to request any sort of forced removal from devices.
  • TikTok did immediately shut down India operations after a government ban, but the U.S.-China conflict is much different than the India-China conflict, which has included recent military skirmishes at the border. As one source explained it to me: To publicly support TikTok in India was to be viewed as unpatriotic, among both politicians and users.

The bottom line: If this doesn't soon get decided in a boardroom, it's going to get decided in a courtroom.

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