WASHINGTON, April 5 — A proposed deal to spin off TikTok’s US operations has been put on hold after China signaled it would not approve the plan, following President Donald Trump’s recent announcement of increased tariffs on Chinese imports, according to two sources familiar with the matter.
WASHINGTON, April 5 — A proposed deal to spin off TikTok’s US operations has been put on hold after China signaled it would not approve the plan, following President Donald Trump’s recent announcement of increased tariffs on Chinese imports, according to two sources familiar with the matter.
Trump on Thursday extended by 75 days the deadline for ByteDance to divest TikTok’s US assets to a non-Chinese entity. The original deadline, set under a 2024 law, would have enforced a ban on the app in January had no sale occurred.
According to one source, the deal—largely finalised by Wednesday—would have established a new US-based company, majority-owned and operated by American investors. ByteDance would retain a stake of less than 20 per cent. The agreement had reportedly received approval from existing and new investors, ByteDance, and the US government.
When asked about the deal’s status, the Chinese Embassy in Washington reiterated its position, stating: “China has always respected and protected the legitimate rights and interests of enterprises and opposed practices that violate the basic principles of the market economy.”
TikTok declined to comment on the matter.
Tariff Dispute Derails Progress
The Associated Press first reported China's reluctance to approve the deal, which came shortly after Trump’s announcement of a 34 per cent hike in tariffs on Chinese goods—bringing the total tariff level to 54 per cent. China responded with retaliatory measures on Thursday.
“The deal requires more work to ensure all necessary approvals are in place,” Trump stated on social media, explaining his decision to extend the deadline. “We hope to continue working in good faith with China, who I understand is not very happy about our reciprocal tariffs.”
Despite the setback, Trump added, “We look forward to working with TikTok and China to close the deal. We do not want TikTok to ‘go dark.’
Chinese Approval Remains a Major Hurdle
A major obstacle to finalising the deal remains approval from the Chinese government. Beijing has not publicly committed to allowing the sale, and Trump’s recent remarks suggest a renewed wave of Chinese resistance.
The US law requiring TikTok’s divestiture was passed last year with broad bipartisan support, citing concerns that the Chinese government could exploit the platform to spy on Americans or conduct influence operations. Then-President Joe Biden signed the bill into law.
While the law required TikTok to cease operations by January 19 if a sale was not completed, Trump, who began his second term on January 20, chose not to enforce it. In January, the Justice Department informed Apple and Google that the law would not be enforced, prompting both platforms to restore TikTok for new downloads.
New Deal Deadline Set for Mid-June
Trump’s new executive order sets a mid-June deadline to finalise a deal.
Talks led by the White House are reportedly centering on a proposal for TikTok’s biggest non-Chinese investors to increase their stakes and acquire the app’s US operations. The plan would involve creating a new US entity for TikTok and reducing Chinese ownership below the 20 per cent threshold required under US law to avoid a nationwide ban.
Sources say investment firms Susquehanna International Group, led by Jeff Yass, and General Atlantic, chaired by Bill Ford—both represented on ByteDance’s board—are heading negotiations with the White House.
Meanwhile, Walmart has denied a report by ABC News claiming it was considering joining a group of investors in the proposed deal. — Reuters
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WASHINGTON, April 5 — A proposed deal to spin off TikTok’s US operations has been put on hold after China signaled it would not approve the plan, following President Donald Trump’s recent announcement of increased tariffs on Chinese imports, according to two sources familiar with the matter.
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