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Illustration: Aïda Amer/Axios

The travails of TikTok are the most visible example of how the rapidly deteriorating relationship between the U.S. and China can evaporate tens of billions of dollars of corporate value.

Why it matters: When corporations find themselves at the mercy of politicians flexing their geopolitical muscles, they generally end up ruing the encounter.

Driving the news: While President Trump has vowed to ban TikTok if it isn't sold to Microsoft, U.K. bank HSBC — which makes half of its money in Hong Kong — saw its second quarter earnings fall by 67%. The culprit? "Increased geopolitical risk." As the New York Times put it: "In Showdown Between China and the West, HSBC Gets Caught in the Middle."

  • By the numbers: HSBC was worth $157 billion in mid-February. It's now worth less than $90 billion. By contrast, America's largest bank, JPMorgan Chase — which is slightly smaller than HSBC in terms of total assets, but which is much less exposed to China — is worth about $300 billion.

The other side: Hong Kong's stock market remains a fantastic place to raise money. Alibaba Health easily raised $1.3 billion this week in a secondary share offering.

Go deeper

SoftBank signals turnaround, reports third-quarter profit

Photo Illustration: Eniola Odetunde. Photo via Yoshikazu Tsuno/Getty Images

Japan's SoftBank Group on Monday reported $6.1 billion in third-quarter profit, with chairman Masayoshi Son telling analysts that "regardless of interest rates or regardless of who the president is, we want to continue to invest in the American market, and also in China."

Why it matters: This was a strong rebound for SoftBank, which had been bleeding red ink.

Pompeo, wife misused State Dept. resources, federal watchdog finds

Former Secretary of State Mike Pompeo. Photo: Joe Raedle/Getty Images

The State Department's independent watchdog found that former Secretary of State Mike Pompeo violated federal ethics rules when he and his wife asked department employees to perform personal tasks on more than 100 occasions, including picking up their dog and making private dinner reservations.

Why it matters: The report comes as Pompeo pours money into a new political group amid speculation about a possible 2024 presidential run.