The U.S. government is preparing to implement a ban on TikTok starting January 19, 2025, unless ByteDance, its parent company, sells its ownership to non-Chinese stakeholders. This decision, upheld by a federal appeals court, could significantly affect the U.S. economy, particularly for small businesses and content creators who rely on the platform for revenue and growth.
Economic Contributions of TikTok
TikTok has become a critical tool for businesses, especially small and medium-sized enterprises (SMBs), to reach untapped audiences and boost their sales. According to a recent Oxford Economics study, TikTok added $24.2 billion to the U.S. economy in 2023, of which $15 billion was generated by small businesses. The platform also supported 224,000 jobs and contributed $5.3 billion in tax revenue.
The app’s innovative algorithm and user-friendly advertising options have empowered small businesses to scale rapidly. Sectors such as food and beverage, wellness, and business services have experienced substantial growth through TikTok’s ability to connect them with highly targeted audiences.
Impact on Small Businesses and Creators
The ban threatens to disrupt the livelihoods of countless business owners and creators who have built their ventures on TikTok. The sudden removal of the platform could severely affect their income and growth potential.
Entrepreneurs like Felicia Jackson, the founder of CPR Wrap, credit TikTok with driving transformative results. One viral video generated $300,000 in sales within 48 hours, a success she believes directly saved lives through the increased adoption of her product. Similarly, Desiree Hill, a mobile mechanic, expanded her business significantly thanks to TikTok’s reach, securing a 9,000-square-foot facility and employing five team members.
For many creators, TikTok is a primary source of income. Losing access to the platform would result in significant financial challenges, especially for those who have spent years building their audiences.
Challenges for Businesses Targeting Gen Z
Without TikTok, businesses catering to Gen Z—the platform’s most active user demographic—will face difficulties finding alternative ways to connect with this audience. Kristen Schiele, a marketing professor at USC, highlighted that companies targeting Gen Z may struggle to achieve the same level of engagement on other platforms. International brands, such as Korean and Chinese beauty companies, will also find it harder to reach U.S. consumers.
TikTok’s CEO, Shou Zi Chew, has strongly opposed the ban, calling it an infringement on free speech. In response, TikTok has filed an urgent motion to delay the ban while the U.S. Supreme Court reviews the case. The company argues that the ban would harm its 170 million American users, disrupting both livelihoods and creative expression.
Although the U.S. government justifies the ban on national security grounds, the economic and cultural costs could be immense. TikTok has grown into an essential platform for businesses, creators, and communities, and its removal could stifle innovation and limit opportunities for growth.
The future of TikTok in the United States remains unclear. If the ban proceeds, businesses and creators will be forced to pivot to other platforms. However, no existing platform matches TikTok’s ability to deliver viral reach or cost-effective marketing opportunities.
The potential ban raises complex questions about balancing security concerns with economic and cultural considerations. While the government seeks to address national security risks, the broader repercussions of this decision on businesses, creators, and the economy at large cannot be overlooked.