Expert says Trump's $5 billion TikTok deal payment appears illegal - Business Insider

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Trump's claim that the TikTok deal includes a $5 billion payment is terrible for venture capital and appears 'illegal,' according to an expert

over the weekend for a deal that has Oracle and Walmart buying 20% of a new TikTok company that operates in the US, but some parts of the agreement remain unclear even to the people involved in it.$5 billion to the US Treasury, which will be used to set up an education fund. It's a claim he told reporters on Saturday and said to attendees at a campaign rally.

If companies think they will have to pony up some sort of extra payment to the US government, this could ultimately discourage foreign acquisitions of private US companies, killing one of the major ways startups repay their investors, according to financial regulation expert Martin Chorzempa of the Peterson Institute for International Economics.

"I've read all the CFIUS legislation," Chorzempa told Business Insider, referring to the Committee on Foreign Investment in the US. "There's nothing in there that says they can shake down a company for a side payment."that, among other things, can review business deals involving foreign actors purchasing or investing in US companies or real estate and recommend whether the president should block them.divest itself of TikTok operations in the US.

"For example," Chorzempa said, "if a company that doesn't have national security implications is bought by a foreign company because it bid more than a domestic competitor, you don't want that domestic competitor to be able to raise a stink about it and block the deal so they can buy the company on the cheap, and then kickback that money to whichever politician put up the pressure to block the foreigner.

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'Trump is jeopardizing the United States' position as the best place in the world to do business, and should think twice about the long-term ramifications of extorting growth businesses, Chinese or otherwise.' Alex Lim IVP

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