Biden Paused Trump’s WeChat and TikTok Bans: Now What?

On Thursday, February 11, the Biden-Harris administration asked the Ninth Circuit Court of Appeals to pause litigation regarding the Trump administration’s attempted ban on the Chinese social media app WeChat, one day after it requested a similar delay in a D.C. federal district court case involving TikTok. The requests mark a major reversal in strategy, as the Trump administration had attempted to resuscitate the WeChat ban in its final week in office despite a series of legal setbacks. Lawyers for the Biden-Harris administration requested the delay pending the completion of a broader Department of Commerce review—an effort that will likely run parallel to the new administration’s broad review of U.S. sanctions programs. Dissecting the successful legal attacks on the Trump-era measures will be an important part of these post-mortems, as recent cases clarify certain limitations with respect to the way U.S. national security laws can be used to address emerging threats.

Until the bitter end, President Trump pushed the boundaries of what U.S. national security laws were designed to accomplish—brazenly using his powers under a 1977 law, the International Emergency Economic Powers Act (IEEPA), to target everything from Chinese social media platforms to war crimes prosecutors. U.S. courts held many of Trump’s most audacious maneuvers at bay—enjoining enforcement of the bans on WeChat and TikTok as well as sanctions on International Criminal Court (ICC) officials. Legal challenges to executive power under IEEPA are nothing new, but the judiciary has historically given the executive branch a wide berth on matters of national security. Judges seemed less deferential with respect to the Trump administration’s sweeping restrictions, creating an emerging body of case law that clarifies—and potentially expands—the scope of IEEPA’s free speech protections and its limits on executive action. Time will tell whether this judicial scrutiny was a unique by-product of the Trump era or if it signifies a broader shift. In the near term—and despite efforts to slow the pace of rulemaking pending further assessment—the Trump administration’s measures will force the Biden-Harris administration’s hand on a number of key national security policies.

Rewind to 1988: The Berman Amendment

IEEPA confers broad powers on presidents during national emergencies, but that authority is expressly limited with respect to measures that impede the flow of information.  This carve-out dates back to the technological stone age—1988, when most of us could only share media via mixed tapes. But while hordes of young Americans waited patiently by the radio for their favorite song, U.S. regulators were confiscating books imported into the United States from sanctioned countries like Iran and Cuba. Believing that the First Amendment did not go far enough to protect the rights of U.S. citizens to receive such information, Representative Howard Berman (D-Calif.) sponsored legislation that limited the president’s authority to impose measures that restrict the exchange of “information and informational materials” with respect to sanctioned person and jurisdictions. In the 1990s, this so-called “Berman Amendment” was revised to specifically protect electronically transmitted information.

The Berman Amendment has existed more or less in the same form ever since, supplemented from time to time with complementary authorizations from the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) with respect to various U.S. sanctions programs. Depending upon the vintage of a particular sanctions program, OFAC regulations may include separate “information and informational materials” licenses, as well as “internet communications” licenses authorizing free services incident to the exchange of personal communications over the Internet, and a host of other provisions designed to allow similar types of speech-related activities.

These provisions notwithstanding, the Berman Amendment does not provide a carte blanche for all speech-related activities. Because the Berman Amendment applies only to IEEPA and the Trading with the Enemy Act of 1917 (TWEA), U.S. sanctions authorized under other statutes (e.g., the United Nations Participation Act, the Antiterrorism and Effective Death Penalty Act, or the Foreign Narcotics Kingpin Designation Act) do not contain the same protections.

Hitting Pause in 2020

In August 2020, the Trump administration announced bold new IEEPA-based restrictions on the use of the Chinese social media platforms WeChat and TikTok. The resulting measures broke the IEEPA mold, being neither a traditional sanction nor an import/export restriction, but a kind of regulatory mutant whose potential strength became apparent when the Commerce Department proposed regulations that would have effectively banned the apps in the United States altogether. Observers were quick to predict that an inevitable round of judicial scrutiny would erode presidential powers under IEEPA.

The observers were right. The ink was scarcely dry on the proposed Commerce rules when a California federal court halted the WeChat ban on First Amendment grounds. The plaintiffs, a group of WeChat users, argued that the app functions as a “public square” for the Chinese-American community in the United States and that the restrictions would infringe upon their First Amendment rights. The court—citing the Trump administration’s own orders against online censorship—concurred.

One week later, a federal court in Washington DC blocked the administration’s TikTok ban, finding that content exchanged by users on TikTok constitutes “information and informational materials” that could not be restricted in light of the Berman Amendment. The court further found that, by virtue of being a conduit of such material, TikTok was itself protected by the Berman Amendment, rejecting the government’s claim that a finding in favor of the plaintiffs would create an “IEEPA-free zone.” On October 30, a Pennsylvania district court granted a second injunction halting the TikTok ban. On December 7, the D.C. district court found that the Trump administration had overstepped its authority to regulate speech by failing to adequately consider an obvious and reasonable alternative to an outright ban.

The TikTok litigation upended a parallel effort by the U.S. Committee on Foreign Investment in the United States (CFIUS)—the Treasury-led interagency committee tasked with reviewing the national security risks associated with foreign investments in U.S. companies—to force a divestiture of the TikTok’s U.S. operations, a matter made more challenging when China promulgated its own set of export controls requiring Chinese government approval for such a transaction.

Chinese social media platforms were not the only target of the Trump administration’s IEEPA-powered wrath.  In September 2020, the United States imposed sanctions on the ICC chief prosecutor and a senior ICC official, effectively prohibiting U.S. persons from dealing with them at all. The judicial response was swift. On January 4, 2021, two days before rioters stormed the U.S. Capitol at President Trump’s behest, a New York judge blocked enforcement of the Trump administration’s ICC sanctions, finding that the measures would likely violate the First Amendment rights of the plaintiffs—including various ICC advocates and supporters.

Fast Forward: Now What?

For now, Trump’s chaotic, Quixotic use of IEEPA seems to have backfired, resulting in a narrower interpretation of executive powers under IEEPA and a firmer articulation of how the Berman Amendment protects online activities. President Biden inherited this legal legacy—and a series of extraordinary crises—when he assumed the presidency on January 20. The Biden-Harris administration now faces the unenviable task of figuring out what to do with the more circumspect ban on Chinese mobile payment platforms issued by Trump on Jan. 5, the executive order that served as the basis for the ICC sanctions, and a host of other last-minute measures imposed by the Trump administration (many of which do not clearly fall under the broad regulatory freeze issued by the new administration due to a potential exemption for rules that impact national security).

Although there is broad bipartisan support for restrictions on Chinese companies, several short fuse deadlines gave the new Biden-Harris team no time to assess next steps. The recent WeChat and TikTok court filings confirm what most suspected–that the new administration will pause the implementation of several key regulations while the broader review is ongoing. This includes regulations required by Trump’s Jan. 5 executive order mandating the Commerce Department to issue a more narrowly tailored set of prohibitions with respect to eight specified Chinese mobile payment apps—WeChat Pay, Alipay, QQ Wallet, as well as CamScanner, SHAREit, Tencent QQ, VMate, and WPS Office—by February 19, 2021.

In the longer term, the Trump administration’s IEEPA-based restrictions on U.S. person transactions in publicly traded securities of certain Communist Chinese military companies are already in effect but will only truly become challenging after the end of a wind-down period on November 11, 2021. This gives the new Biden-Harris team a slightly longer runway to review the prohibitions and propose modifications. Taken together, these Trump-era initiatives may continue to drive the agenda for the new Biden-Harris administration, setting the tone for its approach to key U.S. national security policies. 

About the Author(s)

Stephanie Connor

Stephanie Connor (@stephlconnor) is an international trade lawyer specializing in sanctions administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).