Our companies just got greedy.
China has an asymmetric market, and it’s bad for US businesses but good for Chinese businesses. The US wants to send a message to china that it can also punish businesses that it doesn’t like.
Yes the US has a mechanism to ban a company and that should apply to that company’s app. It’s just trade restrictions like with Huawei. Banning a website will be harder, but by banning advertisers from paying for ads it’ll destroy the profitability of serving American consumers.
Popper’s Paradox on the geopolitical scale.
The media were freaking out about the trade restriction on China, but my circle of D-voting friends and I (and I'm about as libby-lib as a lib can lib) who mostly hated Trump were like "fucking good, more of this please".
I think he mostly caught at least as much shit as he deserved over his shenanigans (far less, in some cases—my "oh no, this is gonna be really bad for the health of our democracy" moment was when he made his "2nd amendment people" remark and suffered no meaningful consequences, back in the '16 campaign) but there were a handful of cases like that, where the negative media response was sharply at odds with our (as, again, solid D voters who AFAIK all voted against him twice) reactions to things he did.
Arguing that the relationship is inherently completely asymmetric isn't really true either. Chinese companies can't really just create a single website that serves both western and Chinese customers. While nothing legally is stopping them, doing this is just going give your western customers a bad time overall, since content delivery across the Chinese border is all but impossible at any reasonable speed. TikTok is an American company, fully owned by Bytedance yes, but they went through incorporating in America and complying with all local laws to do so.
How many Chinese made websites do you use? Unless you're a Chinese immigrant, TikTok is almost certainly the only one. You might use e-commerce websites like AliExpress, but, again, AliExpress is a specially made website that was designed to follow foreign regulation. Chinese companies don't generally operate in other countries. The only reason TikTok is so popular is because they bought their way into the western market with millions of dollars with the acquisition of musical.ly. You have not shown any empirical evidence of any Chinese tech company actually being successful in the west, that hasn't just bought out some American competitor.
Also, nothing is requiring you to setup servers in China to serve your Chinese audience, and in fact it's almost certainly much more expensive to do that, not just for an ICP license but for bandwidth as well. You can serve your Chinese audience well with servers in Japan, Korea, Hong Kong (for now), or other East Asian countries and as long as you follow Chinese laws, the GFW won't block you.
Sure, following Chinese laws is hard and goes against a lot of free speech principles, but at the end of the day the laws are enforced reasonably uniformly. Banning TikTok or Chinese companies in general just shows that Americans can't handle foreign competition. Instead I believe that a better solution would be to simply create uniformly enforced laws that create federal data processing regulation ... like Europe has already done with the GDPR ...
Spin up a cloud VM in China now. Go do it. Try.
I can, literally in minutes, go create a virtual machine hosting a web site in some random middle eastern country I probably would not visit because they're anti... everything. Anti-female, anti-christian, anti-gay, anti-freedom, anti everything I hold dear.
But I can create a virtual machine there, right now, no problems.
China? Hah... no.
That would require paperwork, in person, in chinese, paid for in renminbi, from a Chinese bank.
I'd have to get a chinese id, and submit it to a police station to get an authorisation number, which I would then have to display on every page of that web server.
Chinese companies can spin up whatever they want in any country they please.
Every other country has to sign up to Chinese censorship laws to publish anything at all on that side of the Great Firewall.