Author: Charleston Daily

The House of Representatives advanced a controversial bill Wednesday to give China’s ByteDance six months to divest TikTok or face a US ban on the app, a vote that surfaced national security concerns and scrambled Washington’s usual partisan alliances.

“We have given TikTok a clear choice,” Rep. Cathy McMorris Rodgers (R-Wash.) said Wednesday. If ByteDance doesn’t divest, the company will “side with the [Chinese Communist Party] and face the consequences.”

But the legislation faces major hurdles in the weeks ahead. The Senate has shown less enthusiasm and is concerned about potential legal potholes. The signals from the upper chamber are that it could consider the bill slowly, if at all.

The proceedings in the House were injected with a dose of drama after a last-minute reversal from former President Trump on the issue following four years in office where he’d aggressively pushed for a ban.

Nonetheless, a large majority of the chamber’s Republicans ended up bucking their party’s presumptive nominee and supported the bipartisan bill with 197 in favor and just 15 opposed.

The measure was also opposed by 50 Democrats, with some on the party’s left flank suggesting getting behind a ban could hurt the party with young voters this November.

The overall vote was a broad bipartisan tally of 352-65.

What the bill does

The bill, if enacted, would set in motion a process that could lead to a ban on a key news source for young people and one with 170 million American users. But it’s also an app that collects vast amounts of information about Americans and is owned by a company, ByteDance, that its critics say is under the control of the Chinese government.

ByteDance executives regularly deny the charge and say they operate separately from China’s government. The company immediately slammed the vote, saying “this process was secret and the bill was jammed through for one reason: it’s a ban.”

But national security concerns have fueled the surge in support in recent weeks with Washington moving at rapid speed. The legislation was only introduced about a week ago by Reps. Mike Gallagher (R-Wis.) and Raja Krishnamoorthi (D-Ill.) — who run the House’s China select committee.

It quickly won a unanimous House committee vote and, with today’s tally, has now cleared another key hurdle.

The bipartisan energy for the idea was also fueled by movement within the Biden administration. The Treasury Department has been looking at reining in TikTok through its Committee on Foreign Investment in the United States (CFIUS) but a lack of action there has frustrated lawmakers and helped make this week’s quick action possible.

The bill names both TikTok and ByteDance in its first line and that specificity may be one of the objections in the weeks ahead as the bill is considered by the Senate.

It could complicate the chances of final passage or later be the subject of legal challenges.

Democrat Maxwell Frost, the youngest member of Congress at age 27, encapsulated the potential issues ahead when he told CNN “I don’t think it’ll be helpful with young voters,” adding that “taking a step back, I just think it’s bad policy.”

The bill’s supporters argue instead that it’s not a ban but a more legally defensible divestiture requirement that has more historical precedents, notably a successful move to force China’s owners of Grindr to divest in 2020.

In a recent Yahoo Finance Live interview Rep. John Moolenaar (R-Mich.) tried to draw the distinction, saying, “It’s important to note that this legislation does not enact a ban on TikTok.” He predicted that if the law goes into effect, ByteDance would sell “to whoever is the highest bidder” and the app would remain available.

It was a point that supporters in both parties tried to echo on the eve of the vote.

“This is not a ban on TikTok,” former Speaker Nancy Pelosi said in the final debate on the bill. “It’s an attempt to make TikTok better.”

Last minute politicking

The politics of the bill were also complicated by Trump’s recent 180-degree turn on the issue.

He first proclaimed his position change in a social media post, arguing that getting rid of TikTok would help Mark Zuckerberg and Facebook (META), a company he referred to as “a true Enemy of the People!”

In a CNBC interview this week, Trump doubled down on his position even as he acknowledged that TikTok was a national security risk. He also denied that his change in position came because of a recent meeting with a large Republican donor who is heavily invested in the app.

“It was a meeting that lasted for a few minutes,” Trump said of a recent gathering with hedge fund manager Jeff Yass, who reportedly has a roughly $21 billion personal investment in the app. “He never mentioned TikTok,” Trump added.

On Capitol Hill, some Trump allies nonetheless echoed his arguments, with Rep. Thomas Massie of Kentucky calling the bill the “Facebook Protection and Enhancement Act.”

Either way, the bill now heads to the Senate.

Senate Majority Leader Chuck Schumer hasn’t signaled his next move yet beyond saying he’ll consult with his members. He could send the bill to committee, which would slow it down.

TikTok’s CEO Shou Zi Chew is also expected on Capitol Hill this week and, in perhaps a telling move, his company is focusing its lobbying efforts on the Senate.

“We are hopeful that the Senate will consider the facts, listen to their constituents, and realize the impact on the economy, 7 million small businesses, and the 170 million Americans who use our service,” the company’s statement on Wednesday read.

And many in that chamber have been more skeptical, with Sen. John Cornyn of Texas telling PunchBowl News that “I want to make sure it will actually be effective.”

The bill could also face rising opposition from TikTok creators who have also been making their presence known on Capitol Hill this week.

Viral TikTok content creator Nadya Okamoto said in a Yahoo Finance Live interview, “I’ve told the team at TikTok, we’re ready to go to bat — put us in, coach. We’re ready to go.”

This post has been updated with additional developments.

Ben Werschkul is Washington correspondent for Yahoo Finance.

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