The attempted deal for TikTok to be acquired by an American company faced a significant hurdle when China reportedly delayed the agreement following the announcement of new tariffs by the Trump administration. This delay introduced uncertainty into the future of the popular video-sharing app in the United States.
The situation unfolded amidst escalating trade tensions between the United States and China. The Trump administration, under its "Liberation Day" policy, increased tariffs on Chinese goods entering the U.S. from 20% to 54%. This action prompted a swift response from Beijing, which announced its own 34% tariff on imports of all U.S. products, effective April 10, 2025. These tariffs became a major sticking point in the TikTok deal negotiations.
Sources familiar with the matter indicated that a tentative agreement had been reached, where TikTok's U.S. operations would be spun off into a new company based in the U.S., majority-owned and operated by American investors, with ByteDance, TikTok's Chinese parent company, retaining a minority stake. This deal had reportedly garnered approval from existing and new investors, ByteDance, and the U.S. government. However, China's approval remained a critical factor.
Following Trump's tariff announcement, ByteDance representatives informed the White House that China would no longer approve the deal unless broader discussions around trade and tariffs were initiated. This move was interpreted by some as China using the TikTok deal as leverage in the trade dispute, effectively employing a tactic mirroring Trump's own trade negotiation strategies.
President Trump, on the other hand, suggested that China would approve the TikTok deal "in 15 minutes" if he offered a reduction in tariffs. He extended the deadline for ByteDance to sell TikTok's U.S. operations, claiming that the potential sales deal "requires more work to ensure all necessary approvals are signed." He expressed hope for continued good-faith negotiations with China and acknowledged Beijing's unhappiness with the reciprocal tariffs.
ByteDance issued a statement confirming ongoing discussions with the U.S. government but emphasized that no agreement had been reached and that the two sides still had differences on many key issues. The company also noted that any agreement would be subject to review procedures under Chinese law.
The Committee on Foreign Investment in the United States (CFIUS) had initially ordered ByteDance in 2020 to divest TikTok due to national security concerns. The app has been under scrutiny due to fears that the Chinese government could access user data or censor content. The U.S. House of Representatives passed a bill that would ban TikTok if ByteDance did not divest the app within roughly five months. The future of TikTok in the U.S. remains uncertain as the clock ticks toward that deadline.
The delay in the TikTok deal underscores the intricate interplay between trade policy, national security concerns, and the global operations of technology companies. The situation highlights how trade disputes can have far-reaching consequences, impacting not only traditional trade flows but also the digital economy and the fate of popular social media platforms.
