A TikTok Ban Isn’t a Bad Idea
China has restricted U.S. companies for years. Pushing back could make it stop.
You are halfway through a YouTube video when your screen suddenly goes blank. You try to refresh the page, but you only see an error message. You try to visit another website, and that still works, but YouTube refuses to load. And then you realize: the government banned YouTube.
Users of TikTok have feared this scenario since Trump announced he was banning TikTok for national security reasons. The ban has been criticized as un-American by the Economist, the New York Times, and TikTok’s own lawsuit arguing the ban violates free speech.
These criticisms are fair. For decades the U.S. has professed the importance of open markets and free expression, which conflicts with banning an internet service from another country that competes with American ones. Banning foreign companies for being foreign is naked protectionism.
Yet this issue is more complicated. Done for the right reasons, a TikTok ban could actually be good policy in response to limits on foreign companies operating in China. For example, in China:
- Foreign companies in key industries must partner with Chinese companies (which can lead to trade secret theft);
- There is a strict quota on how many foreign movies can be released in China each year; and
- Major American internet companies are blocked by Chinese ISPs.
Chinese companies, including TikTok’s owner, ByteDance, are protected from foreign competition through strict laws on how non-Chinese companies operate domestically. Chinese companies who expand abroad are essentially subsidized by the additional revenue and users they obtain at home, which can be invested in their overseas operations.
Done for the right reasons, a TikTok ban could actually be good policy.
Yet Chinese companies that move into other countries benefit from free market policies. If these companies faced similar restrictions abroad as China imposes at home, Beijing might be forced to rethink its own restrictions, but they don’t. So while the TikTok ban as implemented by Trump may be bad policy, the general idea to restrict Chinese companies in the U.S. as a negotiating tactic is worth considering.
Let’s take a quick look at how China limits foreign companies within its borders. I know exactly what it feels like to wake up and find a service you use daily banned.
It happened to me eleven years ago.
In the summer of 2009, I was in Beijing for a language immersion program. I arrived in early June, and every night after class I kept in touch with college friends over Facebook. Then one day in July, Facebook stopped working. My computer said the site could not be found, and my fellow classmates emerged from the halls to ask if I was also having internet problems. We soon learned the truth: the Chinese government had blocked Facebook.
The internet looked very different in 2009. Twitter had launched the year before, but usage erupted in June as activists in Iran used Twitter to organize protests against then-President Mahmoud Ahmadinejad. In mid-June, millions of people took to the streets to protest an alleged rigged election wearing the green colors of Ahmadinejad’s opponent, leading to the moniker “Green Revolution.” The role of social media in the protests led some to call them “the Twitter Revolution.”
In China, the government was watching carefully. That June was the 20th anniversary of the Tiananmen Square Massacre, and in early July riots broke out in China’s Xinjiang province, where China has (and continues to) engaged in aggressive crackdowns on ethnic minorities. Seeing the rioting in Xinjiang, and watching Iran’s government facing a massive popular uprising fueled by social media, Beijing pulled the plug. Twitter, Facebook, YouTube, Gmail: all of them were blocked from the internet. For Chinese internet users, these services ceased to exist.
The plan seemed to work. That summer, China did not face anti-government riots in most of the mainland. And ever since July 8, 2009, the major American internet companies have remained blocked.
Why has China kept the block for so long? Probably for economic reasons. Blocking major internet companies doesn’t just inhibit anti-government sentiment — it also hinders competition.
Many Chinese websites in the late 2000s were clones of popular American websites. One popular social networking site, Renren (人人), had a UI that was almost an exact copy of Facebook. A 2008 article called “China’s Facebook Clones” noted that Renren — then called Xiaonei (校内) — used a similar layout, color scheme, and icon.
After Facebook was banned, Renren grew rapidly for several years, free of competition from foreign social media. Renren later lost users to Weixin (微信), a “super app” that combines social messaging, payments, and countless other functions in a single smartphone app.
You may have heard of Weixin: in the West it goes by the name of “WeChat,” and it is a huge deal for anyone who has connections to mainland China. Alongside TikTok, WeChat was the second Chinese service Trump ordered banned.
While American internet companies aren’t able to operate in China, local companies like WeChat and TikTok-owner ByteDance have been able to build large userbases without competition from foreign companies. China applies these rules to benefit itself, but it breaks them when convenient too. For example, despite Twitter being blocked to Chinese internet users, government officials have Twitter accounts that they use to criticize other countries.
And now the Chinese government is objecting to a sale of TikTok because it claims the U.S. is upset American companies can’t compete with it. As the state-run China Daily wrote:
National security has become the weapon of choice for the Washington [sic] when it wants to curb the rise of any companies from foreign countries that are out-performing their US peers.
Maybe China is right that a TikTok ban is motivated by American firms struggling to compete, but China has no room to talk: China bans foreign competition itself. If the United States banned TikTok to counter unfair Chinese policies, it would be within its rights. International law permits exactly that.
Most large countries are part of the World Trade Organization, an international group committed to free trade. As the WTO says, “Each member receives guarantees that its exports will be treated fairly and consistently in other members’ markets. Each promises to do the same for imports into its own market.” When countries violate those rules by imposing trade barriers, WTO members are allowed to impose a “countervailing duty” that balances out the trade harm. So when the European Union gave unfair subsidies to airplane manufacturer Airbus, the U.S. was allowed under WTO rules to impose tariffs on $7.5 billion worth of EU goods to balance out the harm of the subsidies.
This is a normal approach to stopping unfair trade practices: when someone competes unfairly, you impose a punishment that matches the wrong.
And when it comes to foreign companies operating in China, there are a lot of wrongs. Not only are all major U.S. internet companies banned, so are U.S. media organizations like the New York Times, the Washington Post, and Wikipedia. Outside of the internet space, in many industries foreign companies selling goods in China are also forced to work through a joint venture with a local company, with the Chinese company in charge. Foreign media is heavily limited: only 34 foreign films can be distributed each year in China, and all video games must be approved before they can be monetized, a process that includes submitting a list of banned words and removing dead bodies and blood. (For more discussion of China’s trade laws, see my prior piece below.)
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Looking at these limitations, it would be fair for countries, including the U.S., to say that China has engaged in unfair trade practices that violate free market principles, including those it agreed to when joining the WTO. And in order to counteract the harm by China’s policies, limiting the operation of Chinese companies inside the U.S. (and our allies) is fair until China changes its laws. If done for those reasons, a TikTok ban wouldn’t be an illegal act of a president angry at China. It would be a measured response to over a decade of unfair trade practices committed by China that have unfairly benefited Chinese firms.
Limiting the operation of Chinese companies inside the U.S. (and our allies) is fair until China changes its laws.
Unfortunately, it doesn’t seem like this is why Trump banned TikTok. Instead, his administration has pointed to national security and claimed that TikTok is “an active participant in China’s civil-military fusion and is subject to mandatory cooperation with the intelligence services of the Chinese Communist Party.” That’s technically true: every Chinese company is subject to forced cooperation with the government. But it isn’t the right reason to enact a ban without more evidence.
There is a world where the United States and other countries decide that China’s protectionism has gone too far and should be punished if it doesn’t stop. In that world, a TikTok ban would make sense. We just don’t seem to live there.
Note: Many people in the digital rights community, including TechDirt and the Electronic Frontier Foundation have argued the ban on TikTok and WeChat violate the First Amendment. While a judge agreed that the WeChat ban had constitutional problems under the current national security justification, a ban done for trade reasons may be allowed.