Last week, President Trump signed an executive order banning U.S. transactions with ByteDance, the parent company of the popular online video-sharing service TikTok, ostensibly because TikTok’s U.S. operating subsidiary would give the Chinese government access to data about American users. The move will essentially shutter TikTok in the United States—if it’s not sold to an American owner.

To be sure, the Trump administration’s concern about data security and privacy violations of online communications is fairly widespread among western governments. It’s also common for Washington to forbid foreign direct investment on the grounds of national security, which is a permissible (albeit murky) action under World Trade Organization rules.

What’s different about this latest “national security” concern, is President Trump’s direct action to force the divestiture and sale of an established operating business and his involvement in trying to broker the sale. Specifically, the president reportedly engaged in direct talks with Microsoft CEO Satya Nadella about Microsoft acquiring TikTok. And he reputedly gave Microsoft the "go-ahead" to pursue the acquisition.

President Trump has also argued that TikTok should pay the U.S. government for letting the deal happen. He likened it to “key money” landlords extract from tenants when rent controls prevent open market price bidding for apartments.

More broadly, the TikTok affair is part of a pattern. The Trump administration has repeatedly promoted mercantilist industrial policy. It slapped tariffs on a wide range of imported products, pressured U.S. executives to make investments in the U.S. rather than abroad, criticized the head of the Federal Reserve System for being slow to lower interest rates to drive down the value of the U.S. dollar, threatened to impose price controls on pharmaceutical companies, and so on.

However, the president’s move to force the sale of TikTok, while suggesting the U.S. Treasury should receive a kickback, is tantamount to blackmail. His misguided and cynical interference in private markets now more closely resembles a criminal enterprise than political maneuvering.

Perhaps because TikTok is a Chinese-owned business (although it has some minority U.S. owners), this plan to expropriate TikTok’s intellectual property has received little criticism from Democrats in Congress or government officials outside the U.S. However, foreign-owned companies doing business in the U.S. will draw appropriate inferences from this latest action—namely, that the security of private property rights in the U.S. is now compromised. The silence of Democrat Party leaders suggests that a Biden administration can’t be counted on to recognize the fundamental importance of private property rights.

So what’s it all mean for Canada?

Clearly, Canadian companies should worry about future efforts by the U.S. government to transfer wealth, directly or indirectly, from foreign investors to favoured domestic constituents. For example, the Trump administration’s tariffs on Canadian steel and aluminum exports to the U.S.—based on the fatuous grounds of protecting U.S. national security—was a clear signal that even a longtime friend and trading partner enjoys no special status in terms of property rights protection when doing business in the U.S.

For CEOs of Canadian companies, the TikTok case underscores a growing truth—investing and doing business in the U.S. is an increasingly risky proposition. Financial evaluations of prospective business opportunities in the U.S., especially those involving investments in fixed assets, should reflect the significantly increased political risk.