A deal to spin off TikTok’s U.S. assets has been temporarily put on hold after China expressed disapproval following President Donald Trump’s announcement of new tariffs, according to two sources familiar with the situation.
On Friday, Trump extended by 75 days the deadline for ByteDance to sell TikTok’s U.S. operations to a non-Chinese buyer or face a ban, a move that was initially set to take effect in January under a 2024 law. The deal, which had largely been finalized by Wednesday, would have created a new company based in the U.S. for TikTok’s operations, with majority ownership and control by American investors. ByteDance would hold less than 20% of the company.
According to one source, the deal had been approved by existing investors, new investors, ByteDance, and the U.S. government. However, ByteDance confirmed on Saturday that significant differences remained over the terms of the deal.
“We are still in talks with the U.S. government, but no agreement has been reached, and the two sides still have differences on many key issues,” ByteDance said in a statement via WeChat, a Chinese social media platform.
The Chinese Embassy in Washington echoed these sentiments, stating: “China has stated its position on TikTok on multiple occasions. 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.”
The Associated Press was first to report China’s objections.
Trump, explaining his decision to extend the deadline, wrote on social media that more work was needed to ensure the deal’s approval. He also mentioned China’s unhappiness with the reciprocal tariffs, which now stand at 54% on Chinese goods following a 34% increase announced this week. China retaliated on Friday.
Trump indicated that he was willing to reduce tariffs on China in exchange for a deal that would allow TikTok to remain operational in the U.S., where the app has 170 million users. He also confirmed that his administration was in discussions with four different groups about the deal, though he did not specify who they were.
One of the major obstacles to finalizing the deal is gaining approval from the Chinese government. While Trump has expressed hope for a resolution, China’s public stance has remained unclear. The U.S. has demanded that ByteDance reduce its Chinese ownership of TikTok to below the 20% threshold set by U.S. law, which led to the plan for a spin-off of TikTok’s U.S. operations.
“We look forward to working with TikTok and China to close the deal,” Trump wrote on Friday, adding that he did not want the app to “go dark.”
The U.S. Congress passed the law last year with strong bipartisan support, citing concerns over TikTok’s potential use by the Chinese government for espionage and covert influence operations. Despite this, Trump did not enforce the law after he took office in January.
In January, the Justice Department informed Apple and Google that it would not enforce the ban, allowing TikTok to remain available for download. The new deadline for the deal is set for mid-June.
Discussions on the future of TikTok are now focusing on a plan to have the largest non-Chinese investors in ByteDance acquire TikTok’s U.S. operations. The plan involves reducing Chinese ownership in the new entity to below 20%, which would allow the app to continue operating in the U.S. without facing a ban. Among those leading the talks are Jeff Yass’ Susquehanna International Group and Bill Ford’s General Atlantic, both of which hold positions on ByteDance’s board.
