The problem with that reasoning is that it would seem China needs to ban Apple products, Microsoft products including Bing, American movies... But they don't, they just require that anyone doing business there sticks to their laws, which is what most countries do.
The real reason why the US wants to force the sale of TikTok is because it is politically quite left leaning. Lots of stuff about unions and worker's rights, how unfair the real-estate/rental market is, socialism and other left leaning politics... They think it is "radicalizing" young people with what are actually pretty mainstem ideas and views in Europe, but which are to the left of both the major parties in the US.
If a sale is forced to a US company, expect them to screw with the recommendation algo to make it more conservative.