TikTok ban signed into law: What it means for America’s $15 billion small business economy
TikTok will be banned in the United States on January 19, 2025, after a federal appeals court rejected its bid to overturn the ban President Biden signed in April. The law states that if TikTok’s parent company, ByteDance, does not divest its ownership to non-Chinese companies, the app will be banned in the US.
With the ban’s date fast approaching, it has the potential to ripple through the U.S. economy, especially among the seven million small and medium-sized businesses (SMBs) that use the platform to generate revenue and grow their brands.
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Oxford Economics released a report in March 2024 revealing TikTok’s impact on US businesses. In 2023, the platform supported $24.2 billion in U.S. GDP, including $15 billion in revenue generated by small businesses through organic reach and TikTok’s paid advertising. According to the report, TikTok has also facilitated 224,000 American jobs and contributed $5.3 billion in taxes.
In an article from TikTok Newsroom, Blake Chandlee, TikTok’s president of Global Business Solutions, expressed the importance of the platform. “Businesses across America depend on TikTok’s unique ability to help them reach otherwise unreachable customers, generate new revenue streams and increase awareness of their brands, products and services.”
According to Oxford Economics, the food and beverage, health and wellness and business services sectors were particularly dependent on TikTok, which collectively contributed billions to GDP.
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Small business owners across industries say TikTok has transformed their businesses. Felicia Jackson, owner of CPR Wrap, stated that TikTok generated over $300,000 in sales in just two days, saving her business. “It’s amazing,” she told TikTok Newsroom. “And best of all, two lives were saved with our product because they saw it and bought it on TikTok.”
Similarly, Desiree Hill, a mobile mechanic, credited her rapid business expansion — which included leasing a 9,000-square-foot store and hiring five employees — to her success on TikTok.
The ban poses existential challenges for creators like Shira, a 27-year-old who relies on TikTok partnerships for her livelihood. Shira told the BBC that she has spent years building and developing a dedicated audience and that TikTok makes the most money of all the platforms she uses.
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“I’m not sure what all these people are going to do if the ban goes through,” Shira says. “There is no unemployment for creators or decline.”
Kristen Schiele, a professor of clinical marketing at USC, told the BBC that companies targeting Gen Z – a demographic group particularly active on TikTok – may struggle to reach a similar audience elsewhere. She also noted that international brands may find it more difficult to reach American audiences.
“There are a lot of cosmetic brands and skin care brands coming from Korea, especially from China,” Schiele said. “That’s something big. [on TikTok] right now…those different beauty regimens and the amazing skincare products they have.”
TikTok CEO Shou Zi Chew has described the ban as a violation of free speech. In an April video, he said: “This is a ban, a ban on TikTok and a ban on your vote.”
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The impact of the TikTok ban could be catastrophic for millions of users and businesses. According to TikTok Newsroom, small businesses using TikTok as a marketing tool will lose more than $1 billion in revenue in just one month if the ban goes into effect. By comparison, creators could see nearly $300 million in revenue disappear. These numbers represent the livelihoods and communities that TikTok creators have built.
On December 9, TikTok announced it had taken legal action and filed an emergency motion for an order to delay the ban while the U.S. Supreme Court reviewed the case. TikTok has reiterated its commitment to protect its 170 million US-based users and preserve the opportunities it creates for businesses, creators and the economy as a whole.
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This article TikTok Ban Signed into Law: What It Means for America’s $15 Billion Small Business Economy originally appeared on Benzinga.com
