Tariffs Stall TikTok Sale, Stalling U.S. Ownership Transfer
A deal to sell TikTok‘s U.S. operations unraveled this week following the US’s announcement of new tariffs on China along with every other nation. The agreement, which had been in the works for months, fell apart just days after the tariffs took effect on Wednesday.
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The proposed arrangement would have transferred TikTok’s American business into a new company majority-owned by U.S. investors. Negotiations involved ByteDance (TikTok’s parent company), potential buyers including Amazon, Oracle, and others, and Vice President J.D. Vance, with a tentative deal reached by Wednesday. However, the plan collapsed by Friday when TikTok concluded that Chinese authorities would not approve it without additional trade discussions to address the newly imposed tariffs, the insider explained.
The failed agreement had secured support from ByteDance, existing and new investors, and the U.S. government, per the source. On Friday, Trump issued an executive action extending the deadline for a sale by 75 days, just before an initial 75-day extension was set to lapse on Saturday. This stems from a 2024 law signed by former President Joe Biden, which mandates that TikTok be sold to non-Chinese owners or face a U.S. ban, driven by bipartisan concerns over the Chinese Communist Party’s potential influence over or access to the app.
Uncertainty arose Friday morning about whether the parties could announce the tentative deal publicly, as the Chinese government’s stance shifted, impacting TikTok’s interactions with its regulators, the source told the DCNF. ByteDance informed the White House on Thursday that Chinese officials would withhold approval pending trade negotiations with the U.S.
Before the tariffs were enacted, signs pointed to Chinese regulators greenlighting the deal, the insider noted. Under the now-defunct plan, ByteDance would have retained a minority stake in the new U.S.-based entity, permissible under the original law as long as it stayed below 20%. The source added that Trump was expected to formalize the agreement with an executive order, granting a 120-day window to finalize financing.
