Respectfully, that doesn't make much sense. If we're worried about bad things an app can do why don't we make legislation prohibiting apps from doing those bad things? If your model is that bad things are OK if American companies can do them and bad if Chinese companies do them then you still end up getting abused, it's just by Americans in stead of China.
Radical suggestion: stop everyone from doing bad things.
i think the argument is: TikTok is a tool China will use to push propaganda. The problem is that a nation state is using a viral, addictive app for its own purposes.
So the thing to stop everyone from is "letting a maybe-hostile foreign power push an agenda via a software platform."
How do you know what bad things will be done? Do we have laws against tweaking an algorithm to display more anti-American videos or videos on eating Tidepods or other harmful things? How do you even prove it?
We can easily react to American companies doing something like this, but how easy is it to go after a company which is based in another country and has been hostile towards America and American business for decades?
Probably so, but while you are thinking of those details, a country that sends people to gulags and internment camps is collecting data at scale of important people, their families and the people that work around them.
I personally struggle understanding adults installing this app at all, and the fact that it targets mostly oblivious youngsters is pervasive.
Radical suggestion: stop everyone from doing bad things.