Trump’s request for cut from TikTok deal 'unprofessional,' threatens US business environment

Source: Global Times Published: 2020/8/4 11:58:40

Photo: VCG

Trump said on Monday that TikTok would be banned in the US unless it is bought by Microsoft or another company by September 15, and suggested the US Treasury should get a cut from the deal. Although it is unclear what amount Trump is referring to, his statement is a clear departure from market principles and a threat to the US business environment, an expert said. 

According to US news outlets, Trump said on Monday that he is expecting "a very substantial portion" of the price of a potential deal as they are "making it possible for this deal to happen."

In a normal international merger and acquisition deal the fees that go to the government are limited to transaction fees and taxes, Bian Yongzu, a research fellow at the Chongyang Institute for Financial Studies at the Renmin University of China, told the Global Times on Tuesday. 

"What Trump is suggesting sounds like a commission fee," Bian said. "In the market-oriented business world a commission fee for the government is unheard of. It is clearly in breach of business ethics and very unprofessional."

Bian said the statement's implication also raises doubts over the process of a potential deal, as the government already seems too involved in what is supposed to be a market activity. 

Experts said the fact that Trump's arrogant tactics could actually garner him some supporters in the US shows he is adept at manipulating public opinion to serve his re-election campaign.

Trump administration's daylight robbery, blatant intimidation to "smash & grab" from TikTok.Illustration:Liu Rui/GT

Li Yong, deputy chair of the expert committee of the China Association of International Trade, said the whole drama, including what can be expected in the next chapter, is littered with political motivations that seek Trump's re-election.  

"In today's episode, we see Trump trying his hand at political blackmail [through the TikTok deal]," Li told the Global Times on Tuesday.

 "Judging by the open threat Trump has made against TikTok, it is possible that if the deal does happen, the government will put pressure on TikTok to lower its price," Bian said. "It is a departure from free market principles that the US used to take pride in."

Posted in: COMPANIES

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