TikTok Restored in US: What’s the Road Ahead?

TradingKey - TikTok resumed operations in the U.S. less than a day after being banned.

“In agreement with our service providers, TikTok is in the process of restoring service,” the company said on Sunday afternoon. “We thank President Trump for providing the necessary clarity and assurance to our service providers that they will face no penalties providing TikTok.” TikTok, owned by Chinese company ByteDance, said it would work with Trump “on a long-term solution that keeps TikTok in the US”.

For now, it appears that TikTok may continue operating for an additional 90 days, thanks to the extension granted by the Trump administration. This period allows time to explore further solutions.

TikTok ceased services for U.S. users on Saturday evening, after warnings from U.S. officials that American user data could be at risk of misuse under ByteDance’s management. Other applications under ByteDance, including the video editing app CapCut and the social networking app Lemon8, were also taken offline and removed from U.S. app stores on Saturday night.

China’s embassy in Washington accused the U.S. on Friday of unfairly using state power to suppress TikTok. A spokesperson stated that China would take all necessary measures to firmly safeguard its legitimate rights and interests.

Impact of the TikTok Ban

According to Google Trends, searches for “VPN” spiked within minutes of TikTok becoming inaccessible to U.S. users.

Concerns also grew among users about whether they would still receive items purchased through TikTok Shop, the platform’s e-commerce arm.

Marketing agencies reliant on TikTok scrambled to create contingency plans. One executive described the situation as “adding fuel to the fire.” For months, many had hoped a resolution would allow the platform to continue operating.

TikTok Users Flock to a New Chinese Social Media App

Following news of TikTok’s ban, U.S. users flocked to the Chinese app “Rednote,” dubbing themselves “TikTok refugees” or “TikTok nomads.” This sudden migration was largely symbolic, initiated by influencers protesting the U.S. ban on TikTok. Some viral posts joked about simply moving to another Chinese platform.  

Olivia Plotnick, founder of social media agency Wai Social, stated that the migration reflects growing dissatisfaction with Meta’s platforms. She added that while many had assumed Meta would benefit from TikTok’s ban, the trend indicates a different sentiment.

What Does TikTok’s Uncertainty Mean for Small Businesses? 

Millions of U.S. small businesses use TikTok for self-promotion. A report by Oxford Economics revealed that in 2023, small businesses generated $14.7 billion in revenue through TikTok, contributing $24.2 billion in total economic activity.  

Additionally, a 2023 survey showed TikTok to be an effective marketing tool for small businesses, with 78% reporting a return on investment from TikTok ads within six months.  

While not all U.S. businesses rely solely on TikTok, many creators interviewed by MarketWatch praised its broad reach, especially for small enterprises. Platforms like Instagram and Facebook owned by Meta Platforms (META) are also used, but TikTok’s unique influence remains unmatched.

What’s Next for TikTok?

On Friday, just before the court’s ruling, Trump stated that he had discussed TikTok and trade issues with Chinese President Xi Jinping.  

The only truly permanent solution to keep TikTok operational in the U.S. seems to be:  

1) Passing new legislation to override existing laws—a challenging task given bipartisan support for the current legislation—or  

2) Forcing ByteDance to sell TikTok to an acceptable buyer.  

“I would like the United States to have a 50% ownership position in a joint venture,” Trump wrote on Truth Social.

Potential buyers are still lining up. Bloomberg reported on Tuesday that the company is considering selling TikTok to billionaire Elon Musk, though TikTok later dismissed this as “purely fictional.”  

Former U.S. Treasury Secretary Steven Mnuchin and billionaire businessman Frank McCourt have also expressed interest in acquiring TikTok. McCourt, the former owner of the Los Angeles Dodgers, claimed to have secured a verbal commitment of $20 billion from an investor consortium to bid for TikTok.  

So far, ByteDance has firmly stated it will not sell its valuable U.S. assets