TikTok is intertwined with tariffs as Trump weighs his ‘one very big power over China’
It’s not yet known how Donald Trump will resolve TikTok’s complicated legal limbo, but what does seem clear is that the fate of the social media app is increasingly linked in the president’s mind to his top issue of tariffs.
Trump himself directly connected the two this week, laying out a scenario where “if China didn’t approve [a potential future TikTok deal], we could put tariffs on China.”
But nobody — including apparently even Trump himself — is quite sure how it ends.
“I’m not saying I would, but you could clearly do that,” he was quick to add in those Monday comments.
“What I think is very interesting is how these might be woven together,” said Cornell professor Sarah Kreps, who also is director of the school’s tech policy institute, in a recent interview.
In addition to TikTok and tariffs, Kreps also pointed out that a wide array of issues are at play in the complex US-China back-and-forth — from the next steps in the Russia-Ukraine war to the broader US-China tech competition.
The question for the weeks or months ahead, she said, is “what sort of trades can be made to create a win-win for both sides.”.
In a recent interview, Trump further nodded to the link between tariffs and other issues while continuing what a range of observers have noted is a remarkable softening this week — at least rhetorically — when it comes to China.
“We have one very big power over China and that’s tariffs and they don’t want them and I’d rather not have to use it,” he told Fox News’s Sean Hannity in an interview.
Read more: What are tariffs, and how do they affect you?
Trump pledged new 60% duties on China countless times while campaigning in 2024. Yet he is more likely these days to highlight the current duties on China — most of which were imposed in Trump 1.0 — and then hint they might be enough if he gets his way on other issues.
Trump’s message is clearly friendly, even as he underlines that 10% tariffs could still be in the offing as soon as next month.
Trump spoke to Chinese President Xi Jinping last week about tariffs, TikTok, and other topics and came out of the meeting saying, “I like President Xi very much.”
Beijing’s official summary of the call was similarly friendly and quoted President Xi saying the two nations “have broad common interests and vast room for cooperation.”
The tonal contrast is stark with other nations.
Canada in particular has been in Trump’s crosshairs this week, with Trump promising 25% duties that could come to both Canada and Mexico on Feb. 1.
He said Thursday that Canada “has been very tough to deal with.” He added Friday that he still hopes to make Canada the “51st state,” noting that would mean no tariffs.
Trump is pairing his warm tone toward China with a downplaying of the national security concerns that were long the basis of the effort to ban TikTok.
“This linkage between tariffs and a TikTok ban does not at all address the national security concerns that went into the Trump ban in 2020 or the push for legislation in the years that follow,” Kreps said.
Trump has even taken to dismissing national security worries.
“Is it that important for China to be spying on young people, on young kids watching crazy videos and things?” he asked during his recent Fox News interview with Hannity, prompting one of the few pushbacks from the Trump-friendly anchor.
Hannity responded that he didn’t want China spying on anybody.
Another figure who would disagree is 2019-era Trump. During Trump 1.0, he signed an ultimately unsuccessful executive order to ban the app, saying it “continues to threaten the national security, foreign policy, and economy of the United States.”
But while it’s clear that tariffs and TikTok are linked this time, how they play out is anyone’s guess.
And many who are focused on tariff side of the equation caution that Trump may, in the end, have limited flexibility on trade given his longtime focus on the issue.
For years now, he has talked about his desire for a “ring” around the US economy.
“We shouldn’t extrapolate too much” from the initial delays on Trump tariffs, Libby Cantrill, PIMCO’s head of US public policy, said in a live Yahoo Finance appearance this week.
“President Trump is quite ideological about this,” she added. “This is a deep-seated view of his.”
And Trump has also put forth plenty of critiques of China this week — from his focus on its role in fentanyl to the trade deficit to falsely claiming the nation “controls” the Panama Canal.
And — Trump being Trump — his cozy relations with China and Xi could sour quickly as they have at points in the past.
It’s, to say the least, clearly a fluid dynamic. Even as Trump made clear this week that 10% tariffs on China could be in the offing next month, he also floated a possible trip to China.
“Could be,” he said. “I’ve had the invite.”
Ben Werschkul is Washington correspondent for Yahoo Finance.
Every Friday, Yahoo Finance’s Rachelle Akuffo, Rick Newman, and Ben Werschkul bring you a unique look at how US policy and government affects your bottom line on Capitol Gains. Watch or listen to Capitol Gains on Apple Podcasts, Spotify, or wherever you find your favorite podcasts.
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