Other than perhaps seeing their teenage children spending time with the mobile application, it’s possible many readers of Milling & Baking News have limited experience with TikTok. The Chinese video-sharing social networking service was launched in China in 2016 by internet technology company ByteDance and in the United States in 2018. Given that current estimates place active users in the United States at 100 million, chances are more than a few readers have dabbled in TikTok.
The service has been in the headlines for more than two months because of President Trump’s threats to shut it down in the United States. In an Aug. 6 Executive Order, Mr. Trump said the app “automatically captures vast swaths of information from its users” providing the Chinese Communist Party Americans’ “personal and proprietary information.” The same day, Mr. Trump signed an order banning WeChat, a texting, social media and payments app. The moves followed by more than a year Mr. Trump’s decision to bar US companies from doing business with Huawei on national security grounds.
To the degree this diplomatic tiff seems far removed from grain-based foods, it shouldn’t. Many US commodity, ingredient and grain-based foods companies have global operations, and the increasing use of sanctions against businesses as a foreign policy weapon is an ominous sign.
The WeChat ban, attracting less attention, already is a concern. The app had 1.15 billion users in China in 2019 and is widely used by US companies that operate in China, including major multinational businesses, for conference calling, text messaging and for the handling of documents. “The Chinese use it for everything,” one executive said recently.
Drawing still less attention but hitting closer to home for grain-based foods was the blacklisting of 10 Chinese companies by Mr. Trump in late August. Among companies declared “Communist Chinese military companies” by the US Department of Defense was ChemChina, which acquired crop science giant Syngenta SA in 2017 for $43 billion. Some knowledgeable sources insist ChemChina is neither owned nor controlled by the Chinese military. Exactly what the blacklist entails has not been made clear to the companies involved. The blacklisting gives the White House broad powers to impose sanctions on companies doing business with Syngenta. The company’s North American crop protection sales in 2019 totaled $2.5 billion, roughly a quarter of Syngenta’s total revenues. Another $738 million worth of seed were sold. The products are sold by dealers and applied on tens of millions of acres across the United States.
Chinese officials have ratcheted up the anti-US rhetoric in recent days, and speculation has been growing over whether the government would retaliate by blacklisting several US-based companies.
“What the United States has done to TikTok is almost the same as a gangster forcing an unreasonable and unfair business deal on a legitimate company,” according to a Chinese government-sponsored newspaper.
The moves come against a backdrop of continued confusion in agricultural trade between the United States and China. Purchases of grains and oilseeds by China have increased sharply in recent weeks after an extended period of minimal business. The pickup has been welcomed by US producers, but the on again/off again pattern has been tough on producers of beef, poultry and swine who raise specific products for markets and rely on steady, dependable markets, even more than grain and oilseeds growers, to sustain healthy supply chains.
The administration’s policies generally have support from those who see past diplomatic efforts to effect trade policy reform as ineffective. Still, any escalation of the targeting of multi-national businesses in pursuit of foreign policy objectives is a worrisome trend. Food and agribusiness companies based in the United States have enjoyed remarkable growth over the past few decades thanks to opportunities to invest internationally. US businesses broadly have much to lose if pathways for foreign expansion are narrowed or closed.