WEBVTT - The US Passes the Anti-TikTok Bill 0:00:04.480 --> 0:00:12.440 Welcome to Tech Stuff, a production from iHeartRadio. Hey there, 0:00:12.440 --> 0:00:16.160 and welcome to tech Stuff. I'm your host, Jonathan Strickland. 0:00:16.160 --> 0:00:19.439 I'm an executive producer with iHeart Podcasts and How the 0:00:19.520 --> 0:00:23.040 Tech Are You? So I had been working on a 0:00:23.200 --> 0:00:27.400 totally different episode for today, but then yesterday the US 0:00:27.560 --> 0:00:31.680 Senate did what I originally said I thought they wouldn't do, 0:00:32.120 --> 0:00:35.640 which is that they passed a bill that mandates byte 0:00:35.800 --> 0:00:41.000 Dance the Chinese company must sell its subsidiary TikTok to 0:00:41.120 --> 0:00:44.680 some other entity that is not identified as a foreign 0:00:44.840 --> 0:00:49.199 adversary to the United States or face a ban across 0:00:49.240 --> 0:00:51.800 the nation. That bill is now going to President Biden's 0:00:51.840 --> 0:00:54.760 desk for his signature, which seems to be pretty much forthcoming. 0:00:54.800 --> 0:00:56.200 I mean he said he was going to sign it 0:00:56.240 --> 0:00:58.960 into law. In fact, it may have already happened by 0:00:59.000 --> 0:01:01.440 the time I get this episode published, and then that 0:01:01.560 --> 0:01:05.120 means this bill will in fact become law. This is 0:01:05.160 --> 0:01:10.280 a huge moment in technology, in business, in politics, both 0:01:10.319 --> 0:01:13.759 domestic and international, and I figured it would make sense 0:01:13.800 --> 0:01:17.039 to kind of go through and talk through this. So 0:01:17.200 --> 0:01:21.319 first up, let's talk about byte Edance and TikTok, because 0:01:21.360 --> 0:01:24.959 we've learned some things about byte dance in particular recently 0:01:25.240 --> 0:01:30.399 that really have shaped perspectives in very recent weeks. So 0:01:30.480 --> 0:01:33.520 let's start off with a guy named Jean E. Ming. 0:01:34.000 --> 0:01:36.840 He got his start working for a travel website in 0:01:36.920 --> 0:01:41.600 China called Kuksoon, and he spent a brief period working 0:01:41.640 --> 0:01:46.760 for Microsoft, but then ventured out into the entrepreneurial landscape himself. 0:01:47.280 --> 0:01:52.520 So the traditional story is that he created various apps 0:01:52.640 --> 0:01:54.960 in an attempt to kind of find one that really stuck, 0:01:55.000 --> 0:01:58.360 and one of those was a real estate app, not 0:01:58.600 --> 0:02:01.600 too different from what you might see in an app 0:02:01.680 --> 0:02:05.320 like Zillow right, but this one was called ninety nine 0:02:05.400 --> 0:02:10.480 Fong Fang. That app was not a success. It ended 0:02:10.560 --> 0:02:13.639 up eventually going out of business in a couple of years, 0:02:13.800 --> 0:02:16.600 but it would end up being really important to the 0:02:16.639 --> 0:02:20.720 TikTok story for multiple reasons. For one thing, engineers at 0:02:20.800 --> 0:02:24.760 ninety nine Fong developed tools that were meant to help 0:02:24.800 --> 0:02:28.320 for search as well as recommended real estate listings based 0:02:28.400 --> 0:02:32.160 upon user information, which you know a lot of that 0:02:32.160 --> 0:02:35.320 sounds fairly standard for a real estate app, but the 0:02:35.360 --> 0:02:40.960 story goes Jeong Yi Ming decided that maybe you could 0:02:41.160 --> 0:02:46.079 pair a recommendation algorithm that didn't work for real estate, 0:02:46.240 --> 0:02:49.560 but it would work for something like serving someone up 0:02:49.960 --> 0:02:52.960 news that you know. You would learn about a user's behavior, 0:02:52.960 --> 0:02:55.800 their interests, the things that are important to them, and 0:02:55.840 --> 0:03:00.000 you could aggregate news for those users, and you could 0:03:00.200 --> 0:03:04.000 match people to content. Essentially, he was just thinking about 0:03:04.040 --> 0:03:07.440 how the best apply recommendation algorithms. How do you judge 0:03:07.520 --> 0:03:10.720 what someone likes? And then how do you keep them 0:03:10.960 --> 0:03:13.400 at your app by serving them the stuff that makes 0:03:13.440 --> 0:03:16.280 them stay there? How do you make that happen? So 0:03:16.320 --> 0:03:19.920 to that end, again, the traditional story goes. Jiang Yiming 0:03:20.480 --> 0:03:25.280 launched a news aggregator app called Totyoo, and he and 0:03:25.360 --> 0:03:29.560 his former college roommate Leong Rubo decided to found a 0:03:29.600 --> 0:03:32.800 company that would sort of be the umbrella corporation for 0:03:32.880 --> 0:03:36.200 the various apps they were developing, and this would become 0:03:36.720 --> 0:03:41.360 Bite Dance. They sought seed money from investors, and then 0:03:41.440 --> 0:03:45.240 a company founded by an American politically conservative mega donor 0:03:45.560 --> 0:03:48.560 enters into the picture. So we're in around twenty twelve 0:03:48.640 --> 0:03:51.320 at this point ninety nine. Fong really started around two 0:03:51.360 --> 0:03:55.160 thousand and nine. Byte Dance starts around twenty twelve. Now, 0:03:55.240 --> 0:03:59.080 the conservative mega donor is a fellow named Jeff Yas 0:03:59.560 --> 0:04:02.160 And you know, I get it. I know tons of 0:04:02.200 --> 0:04:05.880 y'all out there hate politics in your tech stories, but 0:04:06.040 --> 0:04:10.600 unfortunately this time we have to include politics because it 0:04:10.640 --> 0:04:13.120 plays a huge part in what we're talking about. Me 0:04:13.200 --> 0:04:16.320 we're talking about a ban on TikTok, a legal ban, 0:04:16.520 --> 0:04:19.640 so we have to talk about politics, and Yes in 0:04:19.720 --> 0:04:24.880 particular has had a really huge impact on the TikTok story. 0:04:25.360 --> 0:04:29.440 So Yes co founded an investment company called Susquehanna International 0:04:29.440 --> 0:04:32.080 Group with some of his fellow students at the State 0:04:32.160 --> 0:04:35.680 University of New York at Binghampton back in the nineteen seventies. 0:04:35.800 --> 0:04:39.800 And this company would actually become wildly profitable. It would 0:04:39.800 --> 0:04:42.960 become one of the massive investors in the stock market 0:04:42.960 --> 0:04:45.760 here in the United States, and it would turn Yass 0:04:45.920 --> 0:04:49.040 into a billionaire in the process. So here we are 0:04:49.040 --> 0:04:52.960 in twenty twelve and Susquehanna International Group invests in this 0:04:53.080 --> 0:04:57.640 fledgling Chinese company called Byte Dance, ultimately spending enough to 0:04:58.040 --> 0:05:01.880 purchase a fifteen percent state in the company. And you know, 0:05:01.960 --> 0:05:05.120 that's a healthy chunk of ownership, and today it represents 0:05:05.160 --> 0:05:10.160 a truly massive investment considering the stratospheric altitude that Byte 0:05:10.240 --> 0:05:15.320 dances valuation would reach. So Yas is heavily invested in 0:05:15.400 --> 0:05:19.159 byte Dance, and some argue that the majority of Yas's 0:05:19.320 --> 0:05:23.000 estimated wealth is tied up with this investment. So he 0:05:23.080 --> 0:05:27.160 clearly has a huge incentive to protect Byte Dance. That's 0:05:27.200 --> 0:05:31.080 where his billions of dollars are tied up. Now Moreover, 0:05:31.360 --> 0:05:34.000 the New York Times published a piece not too long 0:05:34.040 --> 0:05:38.440 ago about some court records that were accidentally made public. 0:05:38.800 --> 0:05:41.920 These records relate to a lawsuit in which some former 0:05:42.160 --> 0:05:46.040 ninety nine Fong engineers allege that their work has been 0:05:46.120 --> 0:05:51.440 repurposed to power byte Dances various apps, most notably TikTok, 0:05:51.839 --> 0:05:55.600 and that these engineers were not fairly compensated for the 0:05:55.720 --> 0:05:59.680 use of their work. The court records show that Susquehanna 0:05:59.720 --> 0:06:04.840 had invested in ninety nine Fong, So Susquehanna's involvement and 0:06:04.920 --> 0:06:10.159 thus Jeff Yass's involvement with Xiang y Ning, TikTok and 0:06:10.240 --> 0:06:13.520 byte Dance has gone much further back than was first known. 0:06:13.640 --> 0:06:16.560 This goes back to two thousand and nine, so Susquehanna 0:06:16.600 --> 0:06:20.520 apparently invests in ninety nine Fong, but that app, like 0:06:20.600 --> 0:06:23.680 I said, went belly up. And then, according to these 0:06:23.720 --> 0:06:28.520 court documents, Susquehanna essentially created byte Dance and put Xiang 0:06:28.600 --> 0:06:31.160 Yi Ming in charge of it. So, in other words, 0:06:31.400 --> 0:06:33.520 the court records say the origin story for a byte 0:06:33.600 --> 0:06:35.960 Dance is not the same thing as what has been 0:06:36.040 --> 0:06:40.240 generally believed, and that Susquehanna wasn't just a passive investor 0:06:40.360 --> 0:06:44.160 in this Chinese company, but actually took a very prominent 0:06:44.320 --> 0:06:48.560 role in the creation of byte Dance itself. Anyway, those 0:06:48.600 --> 0:06:51.600 court records were never meant to be made public. They 0:06:51.640 --> 0:06:54.520 should not have been made public. So the court subsequently 0:06:54.560 --> 0:06:57.640 removed those records from public access, but not before The 0:06:57.680 --> 0:07:00.600 New York Times was able to review them and publish 0:07:00.680 --> 0:07:03.280 an article about them. So now let's move on. So 0:07:03.600 --> 0:07:07.400 ByteDance begins to form in twenty twelve. It's based in China, 0:07:07.760 --> 0:07:11.960 and we're still quite a ways out from TikTok at 0:07:11.960 --> 0:07:16.480 this point. TikTok's own history is very convoluted. For one thing, 0:07:16.480 --> 0:07:19.440 it's really the story of a few apps kind of 0:07:19.640 --> 0:07:23.680 merging together Voltron's style to create what we know of 0:07:23.920 --> 0:07:28.240 as TikTok today. One of those apps was called Musical 0:07:28.600 --> 0:07:32.200 dot l y or Musically and some of y'all might 0:07:32.240 --> 0:07:34.840 even remember that app. I remember it was really big 0:07:34.880 --> 0:07:37.000 with some of my actor friends back in you know, 0:07:37.080 --> 0:07:41.000 twenty fifteen or so. This app was originally founded by 0:07:41.160 --> 0:07:45.760 Luyu Yong and Alex Hu in China, and the app 0:07:45.840 --> 0:07:49.040 started off originally that they wanted to create an app, 0:07:49.080 --> 0:07:51.360 a totally different app, not musically. They wanted to make 0:07:51.360 --> 0:07:54.480 an app that was an educational tool, something that could 0:07:54.480 --> 0:07:58.400 deliver short informative lectures and such to users. But they 0:07:58.480 --> 0:08:01.880 found that folks didn't want to know learning, so they 0:08:01.960 --> 0:08:05.400 decided to change directions and they made an app designed 0:08:05.400 --> 0:08:08.840 for very short form video content that you could create 0:08:08.960 --> 0:08:12.280 and share short form videos or you could browse short 0:08:12.320 --> 0:08:14.400 form videos, and that these would be you know, less 0:08:14.400 --> 0:08:17.720 than a minute long, somewhere between fifteen seconds and sixty seconds, 0:08:18.040 --> 0:08:21.120 and they included the ability for users to post videos 0:08:21.480 --> 0:08:24.880 with specific music clips. They had a library of music clips, 0:08:24.880 --> 0:08:27.240 so it was kind of like adding a soundtrack to 0:08:27.320 --> 0:08:30.720 your video content. And this led to people using Musical 0:08:30.960 --> 0:08:35.160 dot Le to post lip syncing videos. That's really where 0:08:35.160 --> 0:08:38.520 the app took off. It also coincided with a popular 0:08:38.559 --> 0:08:41.400 lip syncing program that was happening in the United States 0:08:41.400 --> 0:08:43.480 at the time. So again when I say it got 0:08:43.520 --> 0:08:46.880 really popular, the app really got popular in America. In China, 0:08:46.920 --> 0:08:49.280 it actually didn't move the needle very much at all. 0:08:49.520 --> 0:08:54.040 So with the American market going banana for lip syncing videos, 0:08:54.200 --> 0:08:57.320 the founders decided to establish an office in the good 0:08:57.320 --> 0:09:01.560 old US of A. So they did so in Santa Monica, California. 0:09:01.640 --> 0:09:04.280 This is kind of where the heart of TikTok being 0:09:04.320 --> 0:09:07.840 an American company comes in. So they create this office 0:09:07.880 --> 0:09:12.160 in Santa Monica. The app continues to go incredibly popular. 0:09:12.280 --> 0:09:15.200 At one point, an estimated half of all US teens 0:09:15.640 --> 0:09:19.360 were using Musically and it became the number one app 0:09:19.400 --> 0:09:21.440 on the iOS app store, so it was a really 0:09:21.440 --> 0:09:25.640 big deal. Meanwhile, back in China, ByteDance was working on 0:09:26.160 --> 0:09:29.120 kind of a similar app, not the exact same thing 0:09:29.160 --> 0:09:32.480 as Musically, but along the same lines, and they called 0:09:32.480 --> 0:09:36.160 it dou Yin, which, from what I understand, means shaking 0:09:36.440 --> 0:09:39.560 sound and a cursory description of dou Yen makes it 0:09:39.600 --> 0:09:42.800 sound an awful lot like TikTok. It's an app that 0:09:42.880 --> 0:09:46.640 lets users create and browse short form videos, often ones 0:09:46.679 --> 0:09:49.520 that include popular music in the background. Do youan though, 0:09:49.559 --> 0:09:52.600 also allows people to live stream, which you can do 0:09:52.640 --> 0:09:55.200 on TikTok now too, or you know, watch a live stream, 0:09:55.280 --> 0:09:57.960 not just to do one yourself. And dou Yan also 0:09:58.320 --> 0:10:01.240 has some kind of incredible advanced features that are not 0:10:01.440 --> 0:10:04.800 in TikTok, like being able to search videos based on 0:10:04.880 --> 0:10:07.920 the face of someone who's appearing in the video you're watching, 0:10:08.280 --> 0:10:10.680 or being able to purchase goods that are featured in 0:10:10.679 --> 0:10:13.760 one of those videos just through a couple of presses 0:10:13.800 --> 0:10:16.360 at the screen, or even like to book a stay 0:10:16.400 --> 0:10:18.960 in a resort or a hotel that is featured in 0:10:18.960 --> 0:10:22.040 a video. And as you would imagine it also as 0:10:22.080 --> 0:10:25.800 a Chinese app, has incredibly tight restrictions on the type 0:10:25.800 --> 0:10:29.200 of content that you can post there. Essentially, anything that 0:10:29.240 --> 0:10:32.880 would bring into question the authority or legitimacy of China's 0:10:32.880 --> 0:10:35.760 government is strictly forbidden. As it would later turn out 0:10:35.920 --> 0:10:38.400 that kind of stuff would sort of be forbidden on 0:10:38.480 --> 0:10:40.880 TikTok as well. We're going to have to come back 0:10:40.920 --> 0:10:44.920 to that in a bit. So in September twenty seventeen, 0:10:45.080 --> 0:10:49.040 byte Dance launches TikTok, which is a sister app to 0:10:49.160 --> 0:10:53.440 dou Yin. It's the international version of du Yan and 0:10:53.520 --> 0:10:55.800 as such, it doesn't have all the features and it 0:10:55.800 --> 0:10:58.600 doesn't have all the restrictions that Duyin has. But the 0:10:58.640 --> 0:11:02.160 company had also become aware of Musical Lee and there 0:11:02.240 --> 0:11:04.840 was this clear market in America that was just waiting 0:11:04.840 --> 0:11:08.360 for exploitation, and Music Lee had already tapped into it. Right, 0:11:08.400 --> 0:11:11.000 it makes way more sense if we can get musically 0:11:11.520 --> 0:11:13.199 and we can get access to that, then we get 0:11:13.240 --> 0:11:15.960 access to those users and we don't have to build 0:11:16.040 --> 0:11:19.719 up our audience from scratch. So Byte Dance, through its 0:11:19.720 --> 0:11:24.840 subsidiary Totial, makes an offer to acquire Musical Lee in 0:11:24.920 --> 0:11:29.079 November twenty seventeen. Now, the price tag was not made public, 0:11:29.120 --> 0:11:31.240 but estimates put it somewhere in the neighborhood of eight 0:11:31.320 --> 0:11:34.840 hundred million dollars to one billion smack a Rouse, which 0:11:34.880 --> 0:11:39.400 is a princely sum indeed. Now. At the time, Musical 0:11:39.520 --> 0:11:42.480 Lee released a statement that said the company would continue 0:11:42.480 --> 0:11:46.120 to operate independently in the United States. While, in the 0:11:46.120 --> 0:11:50.120 words of a tech Crunch article, quote taking advantage of 0:11:50.160 --> 0:11:54.240 the distribution in tech that its new parent offers end quote, 0:11:54.440 --> 0:11:58.560 in reality, things would get a bit murkier Byte Dance 0:11:58.679 --> 0:12:03.240 intended to leverage the recommendation algorithm that it had developed 0:12:03.280 --> 0:12:07.160 for Totyoo, possibly by taking it from ninety nine Fong, 0:12:07.200 --> 0:12:10.960 although the company would dispute this and then incorporate this 0:12:11.120 --> 0:12:15.960 recommendation algorithm into the app Musical Lee in order to 0:12:16.040 --> 0:12:20.160 supercharge it and to tap into that massive audience, and 0:12:20.800 --> 0:12:23.880 they decided that it made more sense to fold Musical 0:12:24.000 --> 0:12:28.200 Lee into the company's own efforts to launch TikTok. So 0:12:28.679 --> 0:12:31.480 byt Dance made the call to merge these apps together 0:12:31.840 --> 0:12:34.960 and to drop the Musical Lee name in the process 0:12:35.160 --> 0:12:38.439 and instead use the name TikTok. That was a pretty 0:12:38.520 --> 0:12:42.360 gutsy move in America, right because Musical Lee was young, 0:12:42.480 --> 0:12:45.560 but it was firmly established as a brand already, at 0:12:45.640 --> 0:12:48.880 least for its target audience, So making a change like 0:12:48.920 --> 0:12:51.880 that was risky. And really you could say TikTok was 0:12:52.000 --> 0:12:54.240 kind of the product of three different apps. You had 0:12:54.320 --> 0:12:57.680 Musical Lie, you had Duyen, and you had the original 0:12:57.800 --> 0:13:02.080 version of TikTok. The international variant of dou Yen by 0:13:02.240 --> 0:13:05.960 Dance would make great use of its recommendation algorithm on 0:13:06.240 --> 0:13:08.680 the new app, and this is the algorithm that the 0:13:08.720 --> 0:13:11.760 engineers who worked for ninety nine fond claims came from 0:13:11.800 --> 0:13:15.240 their work, which is a claim again that Bitedance continues 0:13:15.360 --> 0:13:19.320 to dispute as well as Susquehanna International Group they disputed 0:13:19.400 --> 0:13:22.600 as well, that again was found in those court records. 0:13:22.800 --> 0:13:28.880 So TikTok essentially becomes a thing officially in early twenty eighteen. 0:13:29.320 --> 0:13:33.040 When we come back, we'll shift over to politics again 0:13:33.080 --> 0:13:36.920 for a bit, because unfortunately that's what this whole mess 0:13:36.960 --> 0:13:41.000 revolves around. But first, let's take a quick break to 0:13:41.080 --> 0:13:54.760 thank our sponsors. All Right, we're back. Let's plunge on 0:13:54.920 --> 0:13:59.240 into the political bit of this story, and that all 0:13:59.280 --> 0:14:03.280 gets started in China itself. So back in the mid 0:14:03.400 --> 0:14:06.880 twenty tens, China started to pass laws that were meant 0:14:06.880 --> 0:14:10.320 to tighten up national security in various ways, and that 0:14:10.360 --> 0:14:14.160 included stuff like, you know, cybersecurity laws and cracking down 0:14:14.320 --> 0:14:17.360 on digital espionage, you know, that kind of stuff. And 0:14:17.440 --> 0:14:20.720 in twenty seventeen, China passed a law called the National 0:14:20.760 --> 0:14:23.640 Intelligence Law of the People's Republic of China. At least 0:14:23.640 --> 0:14:27.440 that's the Western translation this law, and the law covers 0:14:27.720 --> 0:14:29.960 a lot of ground actually, but the bit that really 0:14:30.000 --> 0:14:32.560 sticks out, at least with regard to you know, the 0:14:32.640 --> 0:14:37.200 TikTok mess would really be articles seven and ten. So 0:14:37.400 --> 0:14:41.480 Article seven states that all Chinese citizens and companies and 0:14:41.600 --> 0:14:46.200 organizations are to cooperate in intelligence gathering efforts, and that 0:14:46.320 --> 0:14:49.280 seems to mean that if the Chinese government wants information 0:14:49.360 --> 0:14:53.479 on something and a Chinese company has access to this information, 0:14:53.800 --> 0:14:57.040 that company is obligated to hand it over to the government. 0:14:57.480 --> 0:15:00.160 Article ten says that that goes for you too, two 0:15:00.400 --> 0:15:03.080 companies that are owned by Chinese interests but are actually 0:15:03.120 --> 0:15:07.000 operating overseas. So essentially, the law says it doesn't matter 0:15:07.360 --> 0:15:10.640 if the business practices are outside of China or not. 0:15:10.960 --> 0:15:14.720 If the company that's conducting these matters ultimately is a 0:15:14.800 --> 0:15:18.840 Chinese company, then it is subject to this law, whether 0:15:18.920 --> 0:15:22.720 the business is happening inside China or someplace like the 0:15:22.760 --> 0:15:27.520 United States. Now, how and how frequently the Chinese government 0:15:27.680 --> 0:15:33.000 enforces this law isn't exactly clear, but the implication worries 0:15:33.080 --> 0:15:35.600 a lot of folks internationally for good reason. You know, 0:15:35.720 --> 0:15:38.560 Chinese companies make a lot of stuff, and a lot 0:15:38.600 --> 0:15:42.040 of that stuff ends up in complex critical systems like 0:15:42.240 --> 0:15:46.560 telecommunications infrastructure, for example. So for that reason, countries like 0:15:46.600 --> 0:15:50.040 the United States began to reconsider the wisdom of allowing 0:15:50.320 --> 0:15:55.480 telecommunications companies to use Chinese components in their various systems, 0:15:55.640 --> 0:15:58.840 out of fear that these companies could end up being 0:15:58.880 --> 0:16:02.880 complicit in spying on America on behalf of China, with 0:16:03.160 --> 0:16:07.840 or without that telecommunications companies, you know, knowledge or active cooperation, 0:16:08.240 --> 0:16:12.360 just by using these components that could be snooping on stuff. 0:16:12.560 --> 0:16:14.880 So we in the States started to see calls for 0:16:15.240 --> 0:16:19.520 telecommunications companies to remove and replace these Chinese components with 0:16:19.520 --> 0:16:23.280 stuff from other companies, and that got underway. All right, 0:16:23.320 --> 0:16:26.280 So China passes a law that seems to say any 0:16:26.440 --> 0:16:29.600 Chinese company, et cetera, et cetera, has to comply with 0:16:29.760 --> 0:16:33.400 government requests to gather and share intelligence. Byte Dance is 0:16:33.440 --> 0:16:37.360 a Chinese company, and TikTok is a byte Dance subsidiary. 0:16:37.680 --> 0:16:40.920 So our seed has been planted. Now let's pop on 0:16:41.040 --> 0:16:44.200 over to the old us of a. In twenty eighteen, 0:16:44.440 --> 0:16:48.400 the US government, led by President Donald Trump, got involved 0:16:48.440 --> 0:16:51.840 in a protracted trade war with China, and the issue 0:16:51.840 --> 0:16:55.080 at hand was really a trade deficit, and to go 0:16:55.160 --> 0:16:57.680 into the history of that would require a whole lot 0:16:57.720 --> 0:17:00.960 more time and expertise than I have, just do a 0:17:01.000 --> 0:17:04.760 bad job of describing it, but we can summarize it sloppily. 0:17:04.960 --> 0:17:07.640 I might add by saying that for a few decades now, 0:17:07.800 --> 0:17:13.080 the United States imports from China drastically exceed its exports 0:17:13.320 --> 0:17:17.000 to China. We're bringing in more stuff from overseas than 0:17:17.040 --> 0:17:20.520 we are selling to overseas customers. So the worry is 0:17:21.000 --> 0:17:24.000 that ultimately this could have a huge negative impact on 0:17:24.240 --> 0:17:28.000 American economy and jobs, as well as national security. Whether 0:17:28.080 --> 0:17:32.080 that actually is the case is a lot more complicated, 0:17:32.400 --> 0:17:36.320 and I frankly would go dizzy trying to suss it 0:17:36.359 --> 0:17:40.040 all out. So Trump's administration sought to reverse the trade 0:17:40.040 --> 0:17:43.560 deficit trends, and in order to do that, his administration 0:17:43.800 --> 0:17:48.480 levied tariffs on Chinese imports. And again, going into whether 0:17:48.560 --> 0:17:50.240 or not this was actually a good idea or a 0:17:50.240 --> 0:17:52.959 bad idea would require a lot more time and knowledge 0:17:53.000 --> 0:17:56.280 than I possess, and I don't know ultimately if it 0:17:56.280 --> 0:17:57.840 was a good or bad idea, But I do know 0:17:58.040 --> 0:18:00.000 there were a lot of folks who are at least 0:18:00.119 --> 0:18:04.160 called experts in the field, who debated that topic amongst themselves, 0:18:04.240 --> 0:18:06.960 So I don't know that there's a clear answer anyway. 0:18:07.200 --> 0:18:10.120 As you can imagine, the Chinese government was not thrilled 0:18:10.359 --> 0:18:13.639 about this move. The Chinese government responded by saying that 0:18:13.640 --> 0:18:17.720 Trump's actual goal wasn't to correct some sort of unbalanced 0:18:17.960 --> 0:18:23.240 trade playing field, but rather to directly attack China's economic growth. 0:18:23.280 --> 0:18:26.159 They're saying, oh, you're not trying to fix things. You 0:18:26.320 --> 0:18:30.040 just don't want us to succeed, so you're attacking us, 0:18:30.080 --> 0:18:34.200 which I'm pretty sure is not a really sincere argument, 0:18:34.440 --> 0:18:36.920 but that was the one that was put forth. Things 0:18:36.920 --> 0:18:40.439 got really complicated from an economic standpoint. But this provides 0:18:40.440 --> 0:18:43.199 a pretty good backdrop for what would come next. So 0:18:43.520 --> 0:18:45.639 we get up to the summer of twenty twenty. This 0:18:45.720 --> 0:18:48.480 trade dispute has been going on for two years. President 0:18:48.480 --> 0:18:53.439 Trump says he wants to ban TikTok. He claimed he 0:18:53.480 --> 0:18:55.879 would do this by executive order, and in fact, he 0:18:56.040 --> 0:19:01.800 did issue an executive order to force byte Dance to 0:19:02.160 --> 0:19:05.880 either sell TikTok off or face a ban. In fact, 0:19:05.920 --> 0:19:07.199 for a while he was just saying he was going 0:19:07.240 --> 0:19:09.879 to ban it. That was it, and what no sale 0:19:10.400 --> 0:19:13.840 was just going to be a ban. Byteedance approached Microsoft 0:19:13.840 --> 0:19:17.280 to potentially buy the US portion of the TikTok business 0:19:17.320 --> 0:19:20.639 to kind of spin that off and Microsoft could take 0:19:20.680 --> 0:19:25.040 control of it. But Trump initially rejected that move, but 0:19:25.119 --> 0:19:28.080 Microsoft would remain part of the conversation about a potential 0:19:28.080 --> 0:19:30.560 buyout for about another month. Like this was happening in 0:19:30.600 --> 0:19:34.000 August of twenty twenty, things would move really fast. By 0:19:34.040 --> 0:19:38.040 September twenty twenty, things got real messy. So again Trump 0:19:38.080 --> 0:19:41.800 says he's going to ban the existence of TikTok in 0:19:41.800 --> 0:19:43.639 the United States. And the first time he said that 0:19:44.000 --> 0:19:46.480 was really toward the end of July twenty twenty, but 0:19:46.560 --> 0:19:49.080 then literally just a few days later, Trump reverses his 0:19:49.200 --> 0:19:52.119 stance and he says, you know what, I would allow 0:19:52.160 --> 0:19:54.800 for the sale of TikTok to an American company. Maybe 0:19:54.840 --> 0:19:57.199 we don't ban the app, maybe we do allow it 0:19:57.240 --> 0:19:59.920 to get sold as long as it's to an American company, 0:20:00.359 --> 0:20:04.720 And he establishes a deadline of September fifteenth, twenty twenty, 0:20:04.920 --> 0:20:07.240 and that if a suitable buyer did not emerge by 0:20:07.240 --> 0:20:11.000 that point, he would shut TikTok down with this ban 0:20:11.160 --> 0:20:15.119 by executive order. Now why he wanted to ban TikTok, 0:20:15.600 --> 0:20:19.119 that's a lot harder to say, because it's hard to 0:20:19.200 --> 0:20:22.480 parse what he was trying to convey. He's difficult to 0:20:22.600 --> 0:20:27.880 understand at points. So generally speaking, it seemed that Trump 0:20:28.080 --> 0:20:32.919 believed that although TikTok belonged to a Chinese company, it 0:20:33.080 --> 0:20:37.040 was operating in the United States and that was the issue, 0:20:37.720 --> 0:20:40.520 not from a national security point of view. In fact, 0:20:40.520 --> 0:20:43.320 at one point he said, quote, it's a great asset, 0:20:43.680 --> 0:20:46.240 but it's not a great asset in the United States 0:20:46.480 --> 0:20:50.520 unless they have approval in the United States end quote. 0:20:50.680 --> 0:20:52.879 I don't know what that means. I do not know 0:20:52.960 --> 0:20:55.280 what he was trying to communicate at this point, but 0:20:55.359 --> 0:20:58.639 he did seem to feel that the United States was 0:20:58.760 --> 0:21:02.760 owed some money for the success of TikTok, right like, 0:21:02.840 --> 0:21:05.760 based on what I've read and what I've watched that 0:21:05.920 --> 0:21:09.119 was right around that time period. His argument largely boiled 0:21:09.160 --> 0:21:14.120 down to, hey, Americans are what pushed TikTok to incredible success, 0:21:14.320 --> 0:21:17.840 so America deserves some of that cheddar Now, I don't 0:21:18.040 --> 0:21:21.200 really think that argument holds much water. You know. That's 0:21:21.240 --> 0:21:24.040 like saying to someone that because they were so successful 0:21:24.080 --> 0:21:26.720 in the company, the company deserves all the credit. I 0:21:26.800 --> 0:21:30.320 don't think that really makes sense, but that is what 0:21:30.440 --> 0:21:32.960 I gathered from the material. I mean, that's based upon 0:21:33.119 --> 0:21:35.800 what Trump himself was saying. So again, this was not 0:21:35.920 --> 0:21:40.159 being conveyed in the context of national security. It was 0:21:40.200 --> 0:21:43.200 being conveyed and they got big, So I want the money. 0:21:43.640 --> 0:21:46.760 Microsoft and Oracle were both in talks to acquire the 0:21:46.960 --> 0:21:51.240 US based operations of TikTok from Byteedance, and for a 0:21:51.280 --> 0:21:53.760 while it really did look like something along those lines 0:21:53.840 --> 0:21:57.439 was going to happen. But then TikTok filed some legal 0:21:57.560 --> 0:22:02.080 challenges to this executive orders. Arguments included an accusation that 0:22:02.119 --> 0:22:05.919 Trump's administration failed to produce any evidence that TikTok is 0:22:05.960 --> 0:22:08.760 actually a threat to national security. They're saying like, yeah, 0:22:08.800 --> 0:22:12.840 you're saying that the conditions exist for this to be 0:22:12.840 --> 0:22:15.399 a threat to national security, but you failed to point 0:22:15.440 --> 0:22:18.440 at any actual evidence that it's happening. So just because 0:22:18.480 --> 0:22:21.800 something could happen doesn't mean that you have to ban it. Right, Like, 0:22:22.240 --> 0:22:25.520 any one of you out there could get in your 0:22:25.560 --> 0:22:29.679 car and purposefully drive into crowds of people, but that 0:22:29.680 --> 0:22:31.479 doesn't mean the government has the right to come in 0:22:31.520 --> 0:22:33.679 and say, you know what, we revoked your driver's license 0:22:33.680 --> 0:22:36.159 because you could do this. Even though you haven't done it. 0:22:36.400 --> 0:22:39.120 That's the same sort of thing. Tytuk was saying, Hey, 0:22:39.240 --> 0:22:42.200 you can't ban us on the basis of a threat 0:22:42.240 --> 0:22:44.879 to national security if you can't prove that we're a 0:22:44.880 --> 0:22:48.880 threat to national security. And TikTok would also bring up 0:22:48.920 --> 0:22:53.560 other arguments, saying that this was an unconstitutional move in 0:22:53.560 --> 0:22:57.359 the first place, that it violated First and Fifth Amendment rights, 0:22:57.800 --> 0:23:00.840 and the ban would get moved moved back, like the 0:23:00.880 --> 0:23:04.120 deadline would be moved back a couple of times throughout this, 0:23:04.520 --> 0:23:08.040 and TikTok successfully petitioned a court for an injunction against 0:23:08.080 --> 0:23:11.440 the order to prevent the ban in late September twenty twenty, 0:23:11.640 --> 0:23:14.720 so everything was on hold. Then we get to early 0:23:14.760 --> 0:23:19.640 November twenty twenty, where the US held its previous election 0:23:20.080 --> 0:23:24.720 and President Trump lost that election, a matter of which 0:23:24.760 --> 0:23:31.120 there was some debate. Anyway, this obviously redirected political momentum 0:23:31.200 --> 0:23:33.960 at this point. Right the president who would issued this 0:23:34.040 --> 0:23:37.840 executive order is no longer going to be president after 0:23:38.440 --> 0:23:41.639 January twenty, twenty twenty one, so a lot of the 0:23:41.680 --> 0:23:47.240 pressure that had been on TikTok was alleviated. Was now 0:23:47.600 --> 0:23:49.520 the guy who had made the order wasn't going to 0:23:49.560 --> 0:23:55.880 be in charge anymore. Biden would ultimately revoke that executive 0:23:55.960 --> 0:23:58.520 order with an executive order of his own that happened 0:23:58.520 --> 0:24:00.640 in the summer of twenty twenty one, but he did 0:24:00.680 --> 0:24:04.600 call for an investigation into TikTok to actually determine if, 0:24:04.680 --> 0:24:07.960 in fact there were any threats to national security present. 0:24:08.240 --> 0:24:10.399 And things kind of quieted down for at least a 0:24:10.440 --> 0:24:13.159 couple of months, right like, there was this investigation that 0:24:13.200 --> 0:24:15.760 was going to go on, but otherwise things kind of 0:24:16.200 --> 0:24:18.560