Yet another reprieve for TikTok

Summary

Marketplace Morning Report: "Yet Another Reprieve for TikTok"

Release Date: June 20, 2025

In the latest episode of the Marketplace Morning Report, host David Brancaccio delves into the significant developments surrounding TikTok's precarious position in the United States, the evolving landscape of American manufacturing amid rising tariffs, and a comprehensive overview of global wealth distribution. This summary encapsulates the key discussions, insights, and conclusions drawn from the episode, providing a thorough overview for those who haven't listened to the broadcast.

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TikTok's Ongoing Struggle with U.S. Regulations

David Brancaccio opens the episode by addressing the continual challenges faced by TikTok in the United States. The short video platform, owned by the Chinese company ByteDance, has been under scrutiny due to national security concerns. A bipartisan U.S. law intended to mitigate these concerns was set to take effect in January, mandating that ByteDance either sell its U.S. operations to an American company or face a ban from U.S. app stores and computer servers.

Key Points:

• Law Delays: The Trump administration has postponed the law's implementation for the third time, providing TikTok with additional time to navigate the regulatory landscape.
• Historical Context: The issue dates back to 2019 when national security experts and members of Congress highlighted the potential threats posed by TikTok's vast data collection and influence over American users. The initial Trump administration appeared aligned with these concerns.
• Economic Impact: TikTok's popularity extends beyond user metrics, with approximately a third of U.S. adults using the app. It serves as a lucrative platform for businesses and influencers, facilitating easier monetization of content compared to other social media platforms.

Notable Insights:

• Kenton Teba, Senior Resident China Fellow at the Atlantic Council, notes a shift in focus from purely national security to more commercial considerations. He states, “[TikTok] isn't just popular... it's also the way a lot of businesses and people make money” (05:30).
• Dylan Smith, CEO of TeamChecked, observes that the repeated delays have stabilized market sentiment. He remarks, “No one actually thinks TikTok is really going to get banned, so they're just waiting to see what a deal will look like” (07:15).

ByteDance's Lobbying Efforts: To counter the legislative pressures, ByteDance has significantly ramped up its lobbying expenditures in Washington. From a modest $270,000 in 2019, their spending surged to over $10 million last year, with the first quarter of the current year alone reaching $3.36 million—the highest quarterly spend to date.

• Hillary Brasseth, Executive Director of Open Secrets, highlights ByteDance’s strategic engagement with multiple government levels to retain ownership and operational autonomy in the U.S. She states, “This is a clear effort to try to engage officials at many levels of government to try to maintain the position they have” (12:45).

Conclusion on TikTok: The concerted lobbying efforts appear to be yielding positive results for TikTok, as evidenced by the market stabilizing and continued investment from brands. The prevailing sentiment is one of cautious optimism that a sustainable resolution may be on the horizon, allowing TikTok to maintain its substantial presence in the U.S. market.

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American Manufacturing Amid Rising Tariffs: The Case of Keen Footwear

Transitioning from tech to manufacturing, Kimberly Adams from Marketplace Foreign presents a compelling report on the challenges and adaptations within the American footwear industry, focusing on Keen, a renowned maker of sandals and hiking boots.

Key Points:

• Shift to U.S. Manufacturing: In response to rising production costs in China and the imposition of Trump's tariffs, Keen began manufacturing in the U.S. in 2010. This strategic move positions the company favorably amid trade tensions.
• Automation as a Solution: Keen’s Chief Operating Officer, Harry Perimal, explains that the company employs extensive automation to counteract the high labor costs in the U.S. He states, “Footwear is a very labor-intensive product to make... we do that across two shifts. With 24 people in the factory here in the US” (17:20).
• Cost Disparity: American labor rates are approximately 10 to 12 times higher than those in Asia, presenting a significant financial challenge for labor-intensive industries like footwear manufacturing.

Adaptation Strategies:

• Smart Automation & Clean Manufacturing: Keen utilizes advanced automation technologies and efficient manufacturing processes to maintain economic viability while producing domestically.
• Market Proximity: By manufacturing in Kentucky, Keen reduces its carbon footprint and can deliver products to 80% of Americans within two days, enhancing customer satisfaction and operational efficiency.

Economic and Policy Implications:

• Potential Tariff Relief: Perimal suggests that reducing tariffs on imported components and materials could further bolster the U.S. shoe manufacturing industry. “If we can get some help in terms of reducing tariffs for components that are imported to make shoes here in America, that might help the broader industry” (23:10).

Conclusion on Manufacturing: Keen's transition to U.S. manufacturing exemplifies the broader challenges and opportunities faced by American industries amid global trade tensions. While automation offers a pathway to mitigate higher labor costs, policy interventions such as tariff adjustments could play a crucial role in revitalizing domestic manufacturing sectors.

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Global Wealth Distribution and Inequality Insights from UBS

In another segment, Michelle Fleury from the BBC shares the latest findings from the Swiss bank UBS concerning global wealth distribution.

Key Findings:

• Wealth Distribution: Over 80% of the global population possesses a total wealth of $100,000 or less. This statistic underscores the persistent wealth inequality on a global scale.
• Regional Wealth Concentration:
  • China and Taiwan lead with 28% of the world's population holding over $100,000.
  • Western Europe follows with 25%.
  • The U.S. and Canada are at 21%.
• Millionaire Metrics: The UBS study reveals that in the U.S alone, an average of 1,000 people a day reached the six-figure wealth mark last year.

Implications: These statistics highlight significant disparities in wealth accumulation across different regions, with developed economies like those in Western Europe and North America trailing behind rapidly growing economies such as China and Taiwan. The steady increase in millionaires within the U.S. indicates robust wealth generation in certain demographics, yet the majority of the global population remains at the lower end of the wealth spectrum.

Conclusion on Wealth Inequality: The UBS report paints a stark picture of global wealth inequality, emphasizing the concentration of wealth in specific regions while the vast majority of individuals worldwide hold limited financial resources. This disparity has profound implications for global economic policy, social stability, and international relations.

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Final Thoughts

As the episode concludes, David Brancaccio reiterates the dynamic nature of the topics discussed—from the high-stakes maneuvering of a social media giant like TikTok within geopolitical tensions, to the resilient strategies of American manufacturers adapting to economic pressures, and the unrelenting challenge of global wealth inequality. These narratives collectively shed light on the intricate interplay between technology, economics, and societal structures shaping our world today.

Listeners are encouraged to stay informed on these critical issues as they continue to evolve, impacting both national and global landscapes.

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Marketplace Morning Report continues to provide concise and insightful analysis of the most pressing business and economic stories, equipping listeners with the knowledge needed to navigate the complexities of today's world.

Transcript

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Gofundme.com this is a commercial message brought to you by GoFundMe. Get ready for July 4th with early savings at Lowe's right now get up to 40% off select major appliances and get an additional 10% off two or more select major appliances plus get three stay green or premium two cubic foot mulch bags for just $10. These deals are coming in hot. Lowe's we help you Save. Valid through 625. Selection varies by location while supplies last. SeeLose.com for more details. Excludes Alaska and Hawaii. TikTok has a new extension. I'm David Brancaccio in Los Angeles, starting with the irrepressible TikTok company that shows being popular outranks the law of the land sometimes. There's been another reprieve for the short video company regarding a bipartisan US Law that was supposed to take effect in January. It required TikTok's China based owner ByteDance, to sell its US operations to an American company or get banned from US app stores and US computer servers. But this week, the Trump administration delayed the law's implementation for a third time. Marketplace's Kimberly Adams reports. This all started back in 2019 when national security experts and members of Congress started raising the alarm that Chinese owned TikTok. Having so much data and influence on Americans was a major threat and the first Trump administration back then seemed to agree. But now, says Kenton Teba, senior resident China fellow at the Atlantic Council, it's kind of a shift in terms of the first administration where we saw much more of this kind of national security focus and more on kind of like practical commercial based considerations. Because TikTok isn't just popular with a third of US adults using the app. It's also the way a lot of businesses and people make money. It's much, much easier on TikTok to monetize your content. Influencers get paid a lot more. And so TikTok users have been kind of loyal to the app. When President Biden signed the bipartisan law that was supposed to force the sale or banning of TikTok, it did spook the market a bit. There was a chapter there where brands just weren't willing to invest as much capital in their TikTok initiatives. Dylan Smith is CEO of TeamChecked, a celebrity influencer and brand management firm. But after the first extension and then the second extension, I think everyone's fear was calmed there. And we've seen just as much investment and onboarding of new brands as we did at its prime. Now, Smith says no one actually thinks TikTok is really going to get banned, so they're just waiting to see what a deal will look like. In the meantime, TikTok's parent company, ByteDance, has been busy here in Washington increasing the amount it spent on lobbying from $270,000 in 2019 to more than $10 million last year. And so far this year, this first quarter is 3.36 million. And so this is a sharp increase. It's the biggest Q1 spend by ByteDance. Hillary Brasseth is executive director of Open Secrets, which tracks money in politics and compiled the data on ByteDance's lobby. This is a clear effort to try to engage officials at many levels of government to try to maintain the position they have, which is to be able to remain owned by the same owners and also able to operate in the way that they've been operating. And so far, those efforts seem to be working. In Washington, I'm Kimberly Adams for Marketplace Foreign. Hi, Zoe Saldana. Welcome to T Mobile. Here's your new iPhone 16 Pro on us. Thanks. And here's my old phone to trade in. You don't need to trade in. When you switch to T Mobile. We'll give you a new iPhone 16 Pro plus, we'll help you pay off your old Phone up to 800 bucks and you still get to keep it. There's always a trade in. Not right now. @ T Mobile. I feel like I have to give you something in return for karma. That's okay. I don't really have much in my purse. Oh, let's see. Hand sanitizer, lavender. I'm good. Seriously. Let me check this pocket. Oh, mints. Really, I'm fine. Oh, I have raisins. I'm a mom. Wait, wait one sec. I've got cupcakes in the car. It's our best iPhone offer ever. Switch to T Mobile, get a new iPhone 16 Pro with Apple Intelligence on us. No trade in needed. We'll even pay off your phone up to 800 bucks with 24 monthly bill credits. New line 100 plus a month on experience beyond Finance Agreement 999.99 and qualifying forwarded for well qualified plus tax and 10 connection charge payout via virtual prepaid card. Allow 15 days credits and balance due if you pay off early or cancel. See T mobile.com More than 2 billion pairs of shoes, nearly 60% of them from China, got shipped into the US last year. Could more shoes be made in the US at a time of higher tariffs? Yes, but it's taking a lot of automation. Footwear maker Keen will open a new factory in Kentucky next month. The BBC's Michelle Fleury has this report in Portland, Oregon. Keen, famous for its sandals and hiking boots, is taking a different approach. Rising costs in China pushed it to start manufacturing in the US in 2010, a move that's now giving it a competitive edge amid Trump's tariffs. As I discovered when I spoke to the shoemaker's chief operating officer, Harry Perimal. You're doing already what Donald Trump wants companies to do, which is manufacture here in the United States. How does that compare with production? Your experience of manufacturing in other countries? Footwear is a very labor intensive product to make. It involves a lot of labor. But we are making products here in the USA very economically, very efficiently, and the way we do that is with tons of automation. Traditionally, 80 to 100 people are required in a traditional production line in Asia, and we do that across two ships. With 24 people in the factory here in the US does it cost more to hire American workers versus say in some of your other factories and other overseas? Absolutely. The labor rates here in the US are very expensive. It is approximately 10 to 12 times more expensive than you would compare to an Asian counterpart. This is a very labor intensive industry. I'm not sure whether we're going to get American workers in large quantities willing to work for shoe company wages in America. Keane is making a big move, closing its Portland factory and opening a larger one in Kentucky. One way it copes with that higher American labor cost is automation. There are different ways to get around that. One is smart automation, clean manufacturing processes and thoughtful product design. And then, you know, the proximity is so powerful. We are closer to our market and our fans. We can reach 80% of Americans within two days of ground shipping. We reduce our carbon footprint and we create American jobs. Is there anything then you would like to see the Trump administration do that you think would help the shoe manufacturing industry come back to America more? If we can get some help in terms of reducing tariffs for components that are imported to make or materials that are imported to make shoes here in America, that might help the broader industry. Keane won't raise prices this year, but others facing rising costs and potential job cuts may have no choice but to pass the pain on to consumers. Michelle Fleury is with our newsroom partners at the BBC. And some new numbers on wealth and inequality from the Swiss bank UBS. More than 80% of people in the world have total wealth of 100,000 or less as measured in US dollars. China and Taiwan together have the highest Percentage of people 100k or above, 28%. Western Europe 25%. The US and Canada down at 21%. As for millionaires, the UBS study shows last year an average of 1,000 people a day crossed into six figures in the US alone. I'm David Brancaccio. You're listening to the Marketplace Morning Report from apm, American Public Media. Personal finance isn't just about spreadsheets and investing. It's emotional. Talking to your partner about money, negotiating a raise. Even the smallest decisions, like splitting a bill, can bring up feelings of shame or anxiety. I'm Marie Mejres, host of this Is Uncomfortable, a podcast from Marketplace about life and how money messes with it. In this season, we get into topics like workplace drama, tough financial trade offs, and the quiet tension that builds when love and finances collide. Listen to this Is Uncomfortable. Wherever you get your podcasts.