OPINION: The hidden cost of TikTok’s ban: Small business survival

Photo via: Jernej Furman/Public domain/Wikimedia Commons

As the date for TikTok’s ban looms, many small business owners who use the app to boost sales are increasingly worried. The app hosts an e-commerce feature in which creators can buy and sell products straight from the app. The thing that sets TikTok’s e-commerce platform apart from the rest is how creators can directly link the product they are reviewing or promoting in the video. Within just a few clicks, users can have a brand-new t-shirt or gadget on its way to their doorstep. This seamless integration has been a game changer for small business owners as they do not have to pay for expensive marketing campaigns. TikTok’s unique algorithm also allows users to see products that match their interests. After the ban, these entrepreneurs will have to scramble to find a different platform to support their business. 

The ban on the app could cause a huge loss for small businesses. TikTok said in a court filing that in just the first month after the ban, small businesses could lose $1.3 billion in revenue.  Additionally, many business owners rely on TikTok not only for direct sales but also as a vital tool to drive sales through other channels. According to an Oxford economic study, the impact on the U.S. economy as a whole could be devastating. The study concluded that the app employs about 224,000 people across various sectors, including 98,000 small business owners. These small businesses' use of TikTok also generated $5.3 billion in tax dollars for the U.S. government. 

In addition to TikTok's shop, the app itself can drive sales for specific products based on trends and recommendations from influencers. According to TikTok’s marketing statistics, three out of every four users are likely to buy new products while using the app. The app drives trends and sways users to purchase products based on what everyone else is using. 

The economy was a high selling point for voters this past election. Though the threat to the U.S. public perceived by lawmakers is important, I would highly encourage lawmakers to consider the broader implications for the U.S. economy in addition to national security. Policies aimed solely at addressing security concerns can have unintended consequences on economic stability. Balancing security priorities with economic growth and job creation is essential to ensure the nation remains competitive on the global stage while protecting its citizens.