U.S technology companies including Facebook parent Meta Platforms and Google parent Alphabet are primed to benefit from the potential of an expanded market share if Congress bans Chinese-owned video-sharing app TikTok.
"Short form video content makers and consumers would migrate immediately to both platforms," said Adam Kobeissi, founder of the financial newsletter, The Kobeissi Letter.
"Already, Meta and Alphabet are in second and third place behind TikTok for relative content, with Meta capitalizing on short form video through Instagram Reels and Alphabet doing the same through YouTube shorts," he added. "However, a TikTok ban would critically mark an escalation of some major economic tensions between China and the U.S. in a time when the economy really cannot afford it."
"If this results in sanctions and other means of economic warfare, the seemingly never-ending fight against inflation will be exponentially harder to tame," Koebeissi finished.
Instagram Reels (Facebook.com)
Recently, Rep. Darrell Issa, R-Calif., called TikTok an espionage tool of China, equating it to the Chinese spy balloon that the U.S. shot down earlier this month after crossing from Alaska to South Carolina.
"Having TikTok on our phones is like having 80 million Chinese spy balloons flying over America," tweeted Issa, who's previously called for a nationwide ban on TikTok to "protect America from Chinese surveillance."
In this photo provided by Chad Fish, the remnants of a large balloon drift above the Atlantic Ocean, just off the coast of South Carolina, with a fighter jet and its contrail seen below it, Saturday, Feb. 4, 2023. (Chad Fish via AP / AP Newsroom)
Despite pushback from TikTok, a broad bipartisan bill will be pitched this week by senators to ban the platform by blocking foreign-owned technology that poses a national security threat, particularly a company with connections to China.
A TikTok spokesperson told FOX Business: "We hope that Congress will explore solutions to their national security concerns that won't have the effect of censoring the voices of millions of Americans, and we hope that politicians with national security concerns will encourage the administration to conclude its national security review of TikTok. A U.S. ban on TikTok is a ban on the export of American culture and values to the billion-plus people who use our service worldwide."
Last week, Republicans on the House Foreign Affairs Committee passed a bill that would give the Biden administration new power to ban TikTok and other apps deemed to pose a national security risk. The committee advanced the legislation on a 24-16 vote that went along party lines. It’s unclear when the bill may reach the House floor for a vote.
FOX Business reporter Eric Revell contributed to this article.