If you’re on TikTok, you’ll know it has been a weird couple of weeks for our American counterparts. The social platform is used by 170 million users in the United States —  approximately 51.36% of the country’s estimated 331 million population. The short-video format is a home for comedy, education, influencers, crafts and serves as a platform for many brands and businesses. TikTok’s ‘creator fund’ has been an incredibly effective form of economic empowerment for many American users, while also being a refuge of connection for others. The platform  has also served as a direct-response site for real-time news by citizens and continuously  proliferates ideas and ideologies in the current zeitgeist. 

Last year, the U.S. House of Representatives advanced legislation aimed at addressing national security risks they believed were tied to TikTok, as the app is owned by Chinese company ByteDance—however, this narrative oversimplifies the app’s ownership structure, as ByteDance actually has a variety of shareholders, including significant stakes held by international investors, U.S. firms, and its founder, Zhang Yiming. This nuanced ownership structure complicates the argument that TikTok is solely under Chinese government influence. Notably, China and the U.S. have been locked in a geopolitically tense rivalry since the early 2010s, marked by disputes over trade, technology and the US’ military presence in the Asia-Pacific region. 

Imagery courtesy of Unsplash

Lawmakers expressed concerns that TikTok could allow the Chinese government access to sensitive data from American users or be used to influence public discourse. Critics have pointed out that America has some of the least stringent regulations protecting data privacy from its own corporations, and have argued that the focus on TikTok highlights a double standard, emphasising foreign threats while overlooking the lack of comprehensive domestic legislation to safeguard user data against misuse by U.S.-based tech companies.

The proposed legislation, part of broader efforts to regulate foreign-controlled technology, called for TikTok’s U.S. operations to be divested from ByteDance — and ultimately be sold to a US company. Supporters of the move argued it was necessary to protect citizens’ data and limit potential surveillance, while critics also  raised questions about free speech and the law’s broader implications. 

The legislation leading to the TikTok ban in the United States was signed into law by President Joe Biden on April 24, 2024. This law, known as the ‘Protecting Americans from Foreign Adversary Controlled Applications Act’, required ByteDance, TikTok’s Chinese parent company, to divest its U.S. operations by January 19, 2025. 

Yesterday, that day came and went. But— before we get into the weirdness of it all in the last 24 hours— it must be noted that American users took to protesting the ban in a hilarious way; entirely counterproductive to the alleged aims of the US government. Many US app users began downloading “Red Note,” an app *actually* and directly owned by the Chinese Communist Party, in what appeared to be a mix of satire and defiance. Suddenly, cross-cultural exchange began to occur between US users and Chinese users, reaching beyond the tensions of their respective governments, to share differences in their ways of living. Oh, the beautiful and strange irony. 

In the lead-up to the ban, little was known about how it would be enforced, fueling speculation about the motivations behind it, with many suspecting a political agenda at play. The app’s CEO, Shou Zi Chew, posted a  message over the weekend, expressing his disappointment and emphasising TikTok’s continued commitment to its users. American users, uncertain about the platform’s future, posted their ‘goodbyes,’ sharing emotional farewell videos and reflecting on their time spent on the app. Meanwhile, the rest of us were left imagining an algorithm that, for once, departed from its innate focus on matters in the U.S… and for just twelve hours, this was the case. The app went dark for US users, with seemingly no way to access their accounts. 

Then, out of nowhere, the app was restored, with a cryptic message that ‘thanked President Trump’ (thought he was not yet the president at the time of posting), with Tik Tok further elaborating via X that “in agreement with our service providers, TikTok is in the process of restoring service. We thank President Trump for providing the necessary clarity and assurance to our service providers that they will face no penalties providing TikTok to over 170 million Americans and allowing over 7 million small businesses to thrive.”

American users have returned in what BoF termed as “purgatory” — with uncertainty and the eerily feeling that a political negotiation had taken place, presumably in order to bring favour to the Trump presidency among many other things.  This situation is further complicated by the apparent financial lobbying from U.S. tech giants, such as Mark Zuckerberg’s Meta and Elon Musk’s X, both of which have long been in competition with TikTok. Many suspect that their lobbying efforts played a significant role in the political drama surrounding TikTok, as these companies would benefit from the removal of a growing rival. 

With such a complex web of interests, the return of TikTok to American screens feels more like a brief respite in a larger, ongoing battle for influence and market share in the ever-evolving tech landscape — and this episode leaves us questioning the true motivations behind the TikTok saga, and what it means for the future of global tech regulation in a very fraught and divided world. We’re considering this a developing story. 

For more news, visit the Connect Everything Collective homepage www.ceconline.co.za

Few institutions are as robust in South Africa as SARS – the South African Revenue Service, responsible for managing the country’s tax collection, enforcing customs duties and ensuring each of our compliance with national tax laws. 

As our world continues to shift, and the growth of e-commerce advances at an exponential rate, SARS have had to reassess tax obligations for e-commerce transactions, particularly for low-value imports from global retail giants like Shein and Temu. As we all know, the emergence of Temu on the retail scene has left any and all online search for any product with their offerings front and centre— and at wildly low prices. For an economic base such as South Africa, faced with low income rates and high unemployment, platforms like Shein and Temu serve as the perfect storm to satisfy the collective demand for both basic material needs and excessive consumption. These international e-commerce giants offer affordable goods that are often significantly cheaper than locally available products, making them attractive to cash-strapped consumers.

The question, then, has become the broader impact on South Africa’s local economy. With many South African retailers unable to compete on price, the flood of inexpensive imports threatens to undermine local businesses and in particular industries such as fashion, where product pricing is sensitive to production costs. Our ability to manufacture fashion locally has significantly diminished in recent decades — a topic we looked at more closely on South Africa’s manufacturing legacy for Interlude Chapter 26, last year.

Image by Natalia Voitkevich, via Pexels

As of September 2024, SARS took steps to ensure an even playing field could be levelled between local retail and the allure of international accessibility. With the introduction of a 45% Value-Added Tax (VAT) on all imported goods, including those valued below R500 — a price point previously exempt from import tax — shoppers of giants like Shein and Temu can now experience significant additions to their total order amount than simply the check-out amount and shipping fees. 

Along with VAT, the South African government has also restructured customs duties. Low-value consignments, previously exempt or taxed lightly, now fall under stricter duty categories, with this restructuring aligning with global standards set by the World Customs Organization, ultimately ensuring fair competition is experienced by  local manufacturers and retailers. Now, a consumer purchasing from Shein might find that their R1,000 order incurs an additional customs fee, making their total purchase much more expensive than anticipated.

Local retailers have largely welcomed the new tax measures, with the understanding that they are necessary to protect South Africa’s retail sector and to address the imbalance caused by cheaper international imports. In an interview with Fibre2Fashion, Michael Lawrence of the National Clothing Retail Federation  emphasised that these tax changes are essential for ensuring fair competition and supporting local jobs, saying that “by enforcing the 45 per cent VAT on packages under R500, we anticipate a more level playing field, which will simplify the competitive landscape for all market players. This measure is expected to support the local manufacturing sector by reducing the unfair advantage previously enjoyed by some offshore retailers, thereby fostering a more equitable and sustainable market environment.” In addition, Michael noted that this is part of an ongoing effort to protect our consumer legislation, and that such “measures will ensure that South African consumers are protected by the country’s robust consumer protection legislation. There is a concern about offshore operators without a local presence, as they do not provide the same level of consumer protection and recourse that local South African-based operators, whether locally or internationally owned, are required to offer. This move aims to enhance consumer safety and ensure fair competition within the market.”

While these tax changes aim to create a more level playing field for local businesses, they come at a cost for consumers who now face higher prices on low-value imports. From a privileged perspective, one would argue that challenging any material excess coming in at the cost of our own local, economic future is a non-negotiable— however, this stance doesn’t fully reconcile with the economic nuances within South Africa, in which issues like pervasive inequality are at play. 

As the saying goes— nothing in life comes for free; not even the deliriously low cost products on Temu and Shein. 

For more news, visit the Connect Everything Collective homepage www.ceconline.co.za