Wolfe Research Head of US Policy and Politics Tobin Marcus joins Yahoo Finance to discuss the bill and what are the most likely next steps through Congress and beyond.
When asked if it will ever get through the Senate and be signed into law, Marcus claims: "I think the realistic avenue for getting this done is the next annual defense policy bill, the so-called NDAA for FY [Fiscal Year] '25, which will get done sometimes after the election... that's a bill that happens every year, sort of one of the last bona fide bipartisan things that gets done. TikTok has some level of national security angle to it, it's not a defense policy question but it is somewhat germane..."
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JOSH LIPTON: The House of Representatives passing a controversial bill to give China's ByteDance six months to sell TikTok or face a US ban of the app. That bill which raised issues of national security easily passed by a wide margin in the House. But it is not a done deal yet. Of course, still faces major hurdles in the Senate.
Joining us now is Tobin Marcus, Wolfe Research Head of US Policy and Politics. Tobin, it is good to see you. So, Tobin, the House passes this bill by a landslide? But, of course, now our attention turns to what happens in the Senate, what do you think is going to happen there, Tobin?
TOBIN MARCUS Yeah, I think mostly, a lot of nothing is going to happen. We're going to see a lot of comments from senators. We're going to see a lot of people saying that they agree that TikTok is a threat, that they want to take a close look at this bill, that they have concerns about the specific approach.
But, in general, the Senate tends not to feel a lot of pressure just because the house happens to vote on something, multiple different folks in the Senate, not least of them Maria Cantwell, Chair of Senate Commerce Committee which is one of the committees that will have jurisdiction here, have been working on their own approaches to TikTok for quite a while now.
And the fact that the House suddenly leapt into action on this bill over the course of the past week or so, I think is not necessarily going to make them feel like they need to go ahead and do something right away. And signals from Senate leadership are they're going to run a normal process where everyone is in the loop and everyone gets time to weigh in on the approach, which means probably that this is going to drag out without clear signals in the Senate longer past the point that there is an obvious vehicle to attach it to.
Because we're getting closer and closer to the election. And there are sort of not that many bills that are going to get done between now and the end of the year.
JULIE HYMAN: So if it doesn't get done now, will it ever get done?
TOBIN MARCUS Yeah, I mean, I think that the realistic avenue for getting this done is the next annual defense policy bill, the so-called NDAA, for FY 25, which will get done sometime after the election in the November, December, January time frame. That's a bill that happens every year, one of the last bona fide bipartisan things that gets done.
TikTok has some level of national security angle to it. It's not a defense policy question, but it is somewhat germane. So I think it's a foregone conclusion that we see, an attempt to attach this bill to the House version of NDAA.
Possible that the Senate goes along with that in putting their version together over the summer. So I think that's sort of the next threat that we're looking at. And even if they miss that boat, you know, I don't think that the noise is going away on this, whether it's this bill or some other bill. Like the concern is clear.
JOSH LIPTON: And, Tobin, if this did become law, I'm just interested to get your take. How do you think the CCP, the Chinese Communist Party would respond, Tobin? Would there be a risk do you think they retaliate in China?
A lot of American companies do a lot of business over there. From Apple, to Tesla, to NVIDIA.
TOBIN MARCUS Yeah, so it's an interesting question. It's come up a lot over the course of variety of different economic restrictions the US has rolled out. On China, not least of them the exports on or the restrictions on semiconductor capital exports that have been rolled out and tightened over the course of the past couple of years.
And, generally, we have not seen that much in the way of direct Chinese retaliation. I mean, certainly, directly in the social media and internet advertising domain. It is already the case that the sort of big US internet Giants are not allowed to have much penetration into China.
And, you know, I think they have a lot to lose in terms of really sort of draconian retaliation that is essentially unrelated to what's going on here. If they were to go after Apple, like there are a lot of jobs and economic activity inside of China that are connected to Apple's manufacturing footprint there.
So I think probably we'll see some symbolic actions. But I don't know that it really qualitatively changes the US-China economic relationship or the kind of risks that we face there.