Question

2 ways us as the US could restrict the importing of services like tiktok and the economic implications of it

Answer 1

Earlier this summer, the U.S. government announced it was considering banning Chinese social media apps, including the popular app TikTok. In August, President Trump signed two executive orders to block transactions with ByteDance, TikTok’s parent company, and Tencent, which owns the popular messaging service and commercial platform WeChat, and another executive order requiring ByteDance to sell or spin off its U.S. TikTok business within 90 days, as well as to destroy all its copies of TikTok data attached to U.S. users. As companies including Microsoft, Walmart, and Oracle have expressed interest in buying the app, TikTok is suing the U.S. government, accusing the Trump administration of depriving it of due process.The proposed ban, according to the Trump administration, is intended to safeguard the privacy of U.S. citizens and shield data about them — and government officials — from the Chinese government.

  

What Is the Threat?

If data collection by a company with overseas connections comprises a threat, there are threats all around. The data that TikTok collects pales in comparison to, say, what most American tech companies (as well as banks, credit agencies, and hotels) collect, both visibly and less so. Many institutions that collect sensitive data have already been hacked — it is estimated that there is a cyber attack every 39 seconds — and much of that information is for sale on the Dark Web. If the Chinese government wanted the kind of information TikTok could collect, it could be obtained in many other ways.

Economic implications of banning TikTok

Despite launching in 2016, the platform didn't really become an advertiser's jewel until 2019 - it's estimated that the app brought in anywhere between $200 and 300 million in revenue worldwide last year. And it's aiming for $500 million just in the U.S. during 2020.

Retailers can scale their advertising on TikTok, from brand takeovers for $50,000-100,000 to native ad campaigns for a minimum of $500. Not included in TikTok's revenue is the amount brands put toward influencer marketing. Many creatives are compensated directly by brands and pay is scaled based on the number of followers and average engagement that the user has. Further, some brands might choose to compensate influencers with products. For the early adopters of TikTok advertising, the app has proven to be a worthwhile investment in a short amount of time. A few big winners include:

• American Eagle's Aerie brand, which reported a 100% jump in Q2 sales after engaging with a popular TikTok influencer for the #AerieRealPositivity challenge.
• Mattel, which reported a 116% increase in UNO sales from May 2019 to May 2020 after deploying influencers to promote the card game in its #unowhoyouare TikTok campaign this spring.
• Levi, which hired four TikTok influencers to create personalized denim pieces that were promoted via in-feed ads. Product views for these custom pieces doubled during the campaign and Levi's digital business also doubled from last year, now accounting for 15% of its total revenue.