House panel zeros in on Chinese-owned app TikTok

WASHINGTON — The new U.S. House select committee charged with alerting Americans to the perils of a rising China is zeroing in on TikTok, the Chinese-owned social media application that has built a massive American following despite suspicions that it could be used as a tool of foreign espionage or influence.

The implications of this new scrutiny — part of a broadening congressional review of U.S. engagement with China — are unclear. Washington remains torn over whether it should ban the wildly popular app, order its company to be sold or allow TikTok to keep scrolling across 100 million American smartphones.

House Speaker Kevin McCarthy (R-Calif) launched the committee as one of his first moves, naming 13 Republican members including U.S. Rep. Ashley Hinson of Marion. Democrats have yet to tap theirs.

Rep. Mike Gallagher (R-Wis.), the panel's chair, wants to ban the app or force its sale to an American buyer, citing data security issues and TikTok's potential use by Beijing as a weapon of propaganda. In an interview, he said the overlapping technology, privacy and foreign policy questions raised by the app's meteoric U.S. growth illustrate why the wide-ranging committee is needed.

Gallagher's objections to TikTok, which features user-created short videos, are shared by prominent Democrats. The Biden administration for months has been reviewing a TikTok proposal to restructure its operations to eliminate the risk of Chinese government control or influence. Some analysts believe that congressional action — or the approach of the 2024 election — could force the administration's hand.

But the TikTok controversy is about more than just the fate of the latest internet sensation. It also highlights a key challenge confronting the administration: How to define the parameters of an economic relationship with a nation it regards as the United States' principal strategic rival — one many in Congress describe as an outright enemy.

"Is there such a thing as a private company in China? I'm not sure there is," Gallagher said. "This is what makes the 'new Cold War' so much more complicated than the old Cold War. We never had to decouple from the Soviet Union."

As U.S. policymakers' views on China have hardened into reflexive distrust, Chinese companies that governors and mayors once wooed for job-creating investments now are seen as Trojan horses for the Chinese Communist Party. Republican lawmakers want to prohibit Chinese purchases of American farmland.

Democrats, too, have adopted a more jaundiced view of the risks involved in dealing with the world's second-largest economy. The Biden administration is readying new limits on U.S. investment in Chinese companies, months after the president banned China from buying advanced American computer chips or the equipment to make them.

Despite a growing geopolitical rivalry, two-way U.S.-China trade in 2022 is likely to set a record, while companies such as Apple, General Motors and Caterpillar each year sell billions of dollars worth of goods to Chinese customers — and thus are vulnerable to retaliation from Beijing for any U.S. action against TikTok.

After 40 years of steadily increasing commerce between the two nations, determining which deals are appropriate now and which impair security will not always be easy.

Caught in the middle are multinational corporations. Virginia Gov. Glenn Youngkin, for instance, this month rejected a potential bid by Ford to locate a new electric vehicle battery plant in the state, saying the automaker was acting as "a front for China" in seeking federal subsidies. Ford had been scouting the state for a joint venture with Contemporary Amperex Technology, a Chinese producer of lithium-ion batteries. The $3.5 billion plant reportedly would have meant 2,500 jobs for the state.

The debate over how far to go in thinning economic ties is occurring against a backdrop of public hostility toward China. In a Pew Research Center poll last year, 82 percent of Americans surveyed said they had an unfavorable view of the country, more than twice the figure in 2012 when President Xi Jinping took office.

In an earlier era, TikTok might have been an emblem of collaboration. The service was developed by a subsidiary of ByteDance, a Beijing-based startup that drew funding from American investment firms such as Tiger Global Management, Kohlberg Kravis Roberts & Co., Carlyle Group, Goldman Sachs and Morgan Stanley.

A few months after ByteDance was incorporated in 2012, for example, Susquehanna International Group Ltd. in Philadelphia bought 15 percent of the company in a $5 million financing round. Susquehanna's stake is now valued at $15 billion, according to a report by the Internet Governance Project at the Georgia Institute of Technology.

Former President Donald Trump in 2020 sought to ban TikTok. But a federal judge blocked the move. Now, with the new congressional panel, Capitol Hill is set to wade in. The select committee cannot author legislation, but plans to issue a report.

Tik Tok says it already has spent $1.5 billion on its proposal to address Washington's security concerns by removing its U.S. operations from ByteDance's control. Earlier this month in Maryland, TikTok opened its first "transparency center.“ Each day, teams of software specialists from Oracle review the app's computer code line by line, aiming to ensure that no American user data is being surreptitiously transferred to the Chinese government and that the site's algorithm is not serving up Chinese propaganda.

It may not be enough. Despite offering to firewall its U.S. operation, TikTok is viewed by critics as a proxy for Chinese communism.

"I am not making the case for total decoupling. It's not in our economic interest," Gallagher said. "I don't have a problem with Wisconsinites buying cheap T-shirts from China or with Wisconsin farmers selling soybeans to China. But it's almost going to be on a case-by-case basis."