A federal appeals court has upheld a law mandating that ByteDance, the China-based parent company of TikTok, must divest its ownership of the popular social media platform by January 19, 2025, or face a nationwide ban in the United States.

The U.S. government had previously expressed concerns about TikTok presenting national security threats, primarily because the Chinese government could potentially access its data. Like other social media platforms, TikTok collects a significant amount of personal data from its U.S. users.

James Lewis, an information security expert at the Center for Strategic and International Studies (CSIS), stated last year, “It’s not that we know TikTok has done something, it’s that distrust of China and awareness of Chinese espionage has increased.”

The court’s decision aligns with the government’s apprehensions. It is based on the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA), which President Joe Biden signed into law in April 2024.

TikTok and ByteDance challenged the constitutionality of this legislation. They argued that this ruling infringes on First Amendment rights and lacks substantial evidence of security threats.

However, the court rejected these claims and emphasized the government’s authority to act against potential national security risks.

In response to the ruling, TikTok and ByteDance issued a statement and filed a motion seeking an injunction to delay enforcement of the law pending a potential appeal to the U.S. Supreme Court.

They argue that without such relief, the app’s shutdown would adversely affect its 170 million U.S. users and many small businesses that rely on the platform.

As these legal challenges continue, TikTok’s e-commerce platform, TikTok Shop, demonstrated a growing influence in the U.S. market during Black Friday 2024. The platform reported over $100 million in U.S. sales during the event, tripling its sales from the previous year.

This surge was driven by more than 30,000 live shopping sessions, with popular categories including fashion, beauty, and home products.

The legal developments surrounding TikTok have significant implications for the U.S.-China relationship, especially during the tumultuous trade war between the two nations.

Recently, the Biden-Harris administration imposed increased import tariffs of up to 100% on Chinese goods, including steel, aluminum, semiconductors, and electric vehicles. Trump promised to increase tariffs on all Chinese imports again once in office.