TikTok deal put on hold after China objects over tariffs, sources say

A plan to separate TikTok’s U.S. assets was paused after China signaled it would reject the deal after President Donald Trump’s tariff announcement this week, per two sources knowledgeable about the situation.

On Friday, Trump prolonged by 75 days the deadline for ByteDance to divest U.S. assets of the widely-used short video app to a buyer that is not Chinese, or risk a ban set to go into effect in January according to a 2024 law.

The agreement, whose framework was mostly completed by Wednesday as per one of the sources, aimed to separate TikTok’s U.S. operations into a new entity located in the U.S. and primarily owned and managed by American investors. ByteDance would maintain a stake of under 20%.

The agreement received approval from current investors, new investors, ByteDance, and the U.S. government, according to the source. ByteDance stated early Saturday that disagreements persist regarding 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,” the company said in a statement on its official account on Chinese social media platform WeChat.

“In accordance with Chinese law, any agreement is subject to the relevant review procedures,” it said.

The Chinese Embassy in Washington, asked about the status of a deal for TikTok, said in a statement: “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 disapproval.

“The deal requires more work to ensure all necessary approvals are signed,” Trump said on social media, explaining why he was extending the deadline he set in January that was supposed to have expired on Saturday. “We hope to continue working in good faith with China, who I understand is not very happy about our reciprocal tariffs.”

China currently encounters a 54% tariff on products brought into the United States after Trump declared a 34% increase this week, leading China to respond on Friday. Trump has indicated he would consider lowering tariffs on China in order to finalize a deal with ByteDance to sell the app utilized by 170 million Americans.