Last Wednesday, the Trump administration appeared to have devised a strategy to save TikTok from potential U.S. sanctions. TikTok’s Chinese parent company, ByteDance, collaborated with some U.S. investors and American officials on a proposed ownership restructuring, according to four sources familiar with the discussions. The proposed structure aimed to satisfy a federal mandate requiring TikTok to address national security concerns by restructuring its ownership, thus preventing a ban within the United States.
The negotiations outlined that new investors would acquire a 50 percent stake in a newly formed American entity of TikTok, while ByteDance and other Chinese owners would retain less than a 20 percent share, thereby adhering to legal requirements. ByteDance communicated to the White House that the Chinese government was generally agreeable to the proposed arrangement, two sources indicated.
By Thursday morning, a draft executive order from President Trump detailing the agreement’s general framework was circulating, The New York Times reported after reviewing the document. However, unexpected developments soon halted progress. ByteDance informed the White House that following President Trump’s announcement of additional tariffs on Chinese imports, Beijing withdrew its approval, effectively stalling the deal.
In response to these diplomatic tensions, President Trump extended the deadline for reaching a TikTok agreement until mid-June, temporarily pausing enforcement of the new federal law. “The report is that we had a deal, pretty much, for TikTok, not a deal but pretty close, and then China changed the deal because of tariffs,” Trump explained to reporters aboard Air Force One.
This impasse underscores the complex geopolitical battles between the United States and China, particularly in the realms of trade and technology. It raises crucial questions about the future of TikTok in the American market and whether an agreement is feasible under these strained circumstances.
Despite multiple inquiries, the Chinese Embassy in Washington, TikTok, and ByteDance did not provide comments. The White House directed inquiries to President Trump’s statement on Truth Social regarding his extension of the negotiating period.
The Trump administration and ByteDance had been negotiating a path that would allow TikTok’s significant U.S. investors—like General Atlantic and Susquehanna International Group—to retain their holdings. Simultaneously, the government was introducing new investors to reduce Chinese control. According to insiders, the tentative arrangement involved new investors owning half of the American TikTok entity, while existing investors would hold 30 percent, and Chinese ownership would be capped under 20 percent. Notable investment firms like Blackstone, Silver Lake, and Andreessen Horowitz were reportedly considering stakes in this venture.
This proposed deal included detailed plans for investors, as described by three sources. Nonetheless, further negotiations remained necessary. Some potential investors deemed the agreement provisional, contingent on thorough due diligence, as emphasized by two individuals involved.
Importantly, the discussions were based on ByteDance’s assessment of China’s stance, with American negotiators not directly communicating with the Chinese government. Before President Trump’s tariff decision, ByteDance believed Beijing viewed the restructuring favorably; however, this confidence was not entirely assured, even before the increased tariffs.
The evolving trade war between the U.S. and China threatens to complicate negotiations further. China has responded with retaliatory tariffs, leading President Trump to threaten significant additional tariffs. He has occasionally suggested that a relaxation of tariffs could reciprocate China’s approval of a TikTok deal.
Negotiation leverage through tariffs represents “a remarkable effort to coerce a sale of a foreign company,” according to Anupam Chander, a Georgetown University law professor. However, with the ongoing trade tensions, similar negotiating stalemates could reemerge if tariffs persist, he suggested.
On Friday, ByteDance admitted to being engaged in dialogues with the U.S. government concerning TikTok’s future. Still, it stressed that any resolution relied ultimately on legal processes in China. “There are key matters to be resolved,” a ByteDance spokesperson commented via email, acknowledging that any agreement would necessitate Chinese legal approval. Maggie Haberman contributed to the reporting.
Original Source: https://www.nytimes.com/2025/04/07/technology/trump-tiktok-china-tariffs.html
Category : United States Politics and Government,International Relations,Social Media,Mobile Applications,Mergers, Acquisitions and Divestitures,Private Equity,Computers and the Internet,Customs (Tariff),Executive Orders and Memorandums,Andreessen Horowitz,Beijing Bytedance Technology Co Ltd,Blackstone Group, The,General Atlantic LLC,TikTok (ByteDance),Trump, Donald J,China
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Publish Date: 2025-04-08 05:55:00
