Navarro And Mnuchin Get Into “Knock Down, Drag Out” Oval Office Brawl Over TikTok Ban

In other TikTok-related news, the Washington Post published a lengthy report delineating what was going on inside the West Wing as Trump laid down the executive order, and others who have an interest in getting the deal done.

As Microsoft, under the impression it had the ‘all-clear’, moved ahead with the talks, only to be stymied by Beijing’s fury over Trump’s executive order, which soured the optics of the situation and would have made a sale of TikTok look like a concession on China’s part, others stepped in to intercede with President Trump, who was once again calling the shots while his advisors battled for his ear.

After a succinct refresher on the history of the Trump Administration’s national security concerns regarding TikTok, WaPo identifies VCs with a major investment in ByteDance who stepped in to intercede on the Chinese giant’s behalf, as big-time Silicon Valley dealmakers tried to get closer to the president.

TikTok is considered one of the biggest technological success stories to come out of China. People around the world use the app to make short videos about their lives, pets and dance moves. Parent company ByteDance CEO Zhang Yiming calls it a “window” into the world.

TikTok has 100 million U.S. users, many of whom are under 25 years old. Its success has drawn interest from prominent investors, including Sequoia Capital, a leading Silicon Valley venture capital firm. In 2014, its China arm made a prescient $35 million investment in TikTok’s parent company, giving it a stake that today is reportedly valued at more than $800 million. TikTok’s owner also acquired Musical.ly in 2017 for $1 billion, making it even more attractive to young users.

But with that success came scrutiny. TikTok was first identified as a potential national security threat in summer 2019, when U.S. officials approached ByteDance about concerns regarding its acquisition.

That turned into a formal national security investigation this year. It was led by the Committee on Foreign Investment in the United States (CFIUS), an interagency body that screens foreign investment transactions for national security risks and recommends to the president on security grounds whether certain proposed acquisitions should be rejected.as well as completed acquisitions reversed.

In TikTok’s case, the app has been downloaded more than 175 million times in the United States, and like other apps accesses copious amounts of sensitive personal data, including Internet and browsing activity, location data and search histories. That information is potentially available to the Chinese government under a national intelligence law that requires any Chinese company to “support, assist and cooperate with state intelligence work.”

The news of the investigation sent shudders through the halls of Sequoia Capital. Global managing partner Doug Leone took the lead on advocating for TikTok with the Trump administration, telling people he could use his influence with Trump to help the company, according to a person familiar with the discussions who spoke on the condition of anonymity to describe a private conversation. Leone and his wife have given $100,000 to Trump’s reelection bid, and Leone sits on the president’s task force for reopening the economy, according to public records.

As Trump’s anger simmered over the past two weeks, with periods of silence regularly punctuated by threats of a ban, the China trade hawk faction stepped up to try and push back against the horde of wealthy VCs seeking to dissuade Trump from pursuing the ban.

The hawks accused the finance guys of being dangerously sympathetic to the CCP, and ignoring the good of the country for the sake of the bottom line. Things (reportedly) got heated, and Pete Navarro and Steve Mnuchin got into what was described as a “knock down, drag out fight”.

In front of Trump, trade adviser Peter Navarro and other aides late last week, Treasury Secretary Steven Mnuchin began arguing that the Chinese-owned video-sharing service TikTok should be sold to a U.S. company. Mnuchin had talked several times to Microsoft’s senior leaders and was confident that he had rallied support within the administration for a sale to the tech giant on national security grounds.

Navarro pushed back, demanding an outright ban of TikTok, while accusing Mnuchin of being soft on China, the people said, speaking on the condition of anonymity to discuss private discussions freely. The treasury secretary appeared taken aback, they said.

The ensuing argument — which was described by one of the people as a “knockdown, drag-out” brawl — was preceded by months of backroom dealings among investors, lobbyists and executives. Many of these stakeholders long understood the critical nature of establishing close connections with key figures in the Trump administration.

Of course, this isn’t the first time Navarro has reportedly “fought” somebody during a meeting, according to the American press. Remember that time he almost beat up Dr. Fauci?