By going after TikTok, the US is expanding a fight against Beijing using Chinese-style restrictions on tech companies in a move that could potentially have enormous ramifications for the world’s biggest economies.

The Trump administration’s threat to ban ByteDance Ltd’s viral teen phenomenon and other Chinese-owned apps could significantly hamper their access global user data, which is an immensely valuable resource in a modern internet economy. Any US decision on a wider restriction, which Secretary of State Michael Pompeo said would come shortly, is likely to be followed by a similar pressure campaign that prompted some allies to ban Huawei Technologies Co from 5G networks.

Even if Microsoft Corp or another US company purchases TikTok’s American operations by a September 15 deadline imposed by Trump, the episode is the culmination of a bifurcation of the internet that began when China walled off its own online sphere years ago, creating an alternate universe where Tencent Holdings Ltd and Alibaba Group Holding Ltd stood in for Facebook Inc. and Amazon.com Inc.

It is also splitting many in the industry: Some decry the betrayal of values like free speech and capitalism, while others advocate doing whatever it takes to subdue a geopolitical rival and its pivotal tech industry.

‘Dangerous precedent’

“This sets a dangerous precedent for the US,” said Samm Sacks, a fellow on cybersecurity policy and China digital economy at the New America think tank. “We are moving down a path of techno-nationalism.”

Washington’s moves underscore how quickly the concept of an internet decoupling is becoming a reality even as the world is still figuring out its consequences. India showed the way when it banned dozens of Chinese mobile apps including TikTok and Tencent’s WeChat, while Australia and Japan are reportedly looking at similar options.

At issue is who controls the data — everything from private details like locations and emails to sophisticated mined information such as personal profiles and online behaviour. Like India, Washington worries that TikTok could be funnelling that trove to Beijing, potentially undermining national security by building databases on its citizens.

Worryingly for Beijing, its unclear where the US would draw the line given the extent to which data is essential for companies these days. While Washington’s curbs against Huawei may have some grounds in terms of national security, the argument for banning TikTok is very weak, according to Yik Chan Chin, who researches global media and communications policy at the Xian Jiaotong-Liverpool University in Suzhou, a city near Shanghai.

“It’s not a reasonable argument — it’s like a blanket ban on Chinese companies,” she said. “How can Chinese companies ever do business in America?”

Careful what you wish for

Chinese President Xi Jinping may have himself to blame. China has long championed cybersovereignty, shutting out services like Twitter, forcing foreign firms to secure local partners and distributors in areas from mobile games to cloud services, or curtailing investment in areas such as online banking. Microsoft Corp’s Bing and LinkedIn, which both censor content in China, remain the only major search engine and social network allowed to operate in China.

“We should respect every country’s own choice of their internet development path and management model, their internet public policy and the right to participate in managing international cyberspace,” Xi told attendees at a high-profile internet conference in 2015. “There should be no cyber-hegemony, no interfering in others internal affairs, no engaging, supporting or inciting cyber-activities that would harm the national security of other countries.”

Now it’s China that wants the world to embrace its companies and eschew overly broad interpretations of national security. Chinese Foreign Ministry spokesman Wang Wenbin said Monday the Trump administration has been stretching the concept of national security without any evidence and only based on presumption of guilt, and called for it to create an open, fair, just and non-discriminatory environment for businesses of all countries.

China’s past statements on cyber-sovereignty reflected its weakness at the time, and that view has evolved substantially since then, according to Zhao Ruiqi, vice director of School of Marxism at the Communication University of China in Beijing.

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