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  January 20th, 2025 | Written by

The Economic Impact of a TikTok Ban in the U.S.

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The looming ban on TikTok in the United States threatens to erase billions of dollars from the U.S. economy and disrupt an essential platform for millions of American businesses and social-media entrepreneurs. According to a report from Yahoo Finance, the app’s disappearance will not significantly impact the overall U.S. economy but may compromise the thriving sub-economy built around it.

Read also: China Considers Selling TikTok’s U.S. Operations to Elon Musk

With approximately 170 million American users, TikTok’s influence stretches across diverse sectors, contributing over $24 billion to the U.S. economy in 2023, as reported by data from the IndexBox platform. While TikTok has reportedly been generating more than $20 billion annually, this figure remains difficult to verify. The app’s impact is evident in individual cases, such as Ella Livingston’s Cocoa Asante in Chattanooga, Tenn., which risks losing $25,000 in monthly sales, forcing potential layoffs of part-time workers.

Additionally, TikTok’s digital store posted a gross merchandise value of $9.7 billion last year in the U.S., highlighting its significance as a burgeoning e-commerce market. Many creators and small businesses rely heavily on TikTok for income, including 19-year-old Gift Oluwatoye from Maryland, who could lose his $5,000 monthly earnings from gaming videos.

Although the broader economic impact might remain negligible in the long run, the immediate consequences for businesses and creators dependent on TikTok are profound. The economic value also extends to consumer enjoyment, said to be worth $73 billion in 2023. As the potential ban approaches, many creators scramble to transition to other platforms, though the unique reach of TikTok’s algorithm proves hard to match.

Source: IndexBox Market Intelligence Platform