Washington/Beijing: A proposed deal to spin off TikTok’s U.S. operations into a new American-owned entity has been put on hold following China’s objections, which came in the wake of President Donald Trump’s latest tariff announcement, according to two sources familiar with the matter.
The U.S. president extended the deadline for ByteDance to divest its TikTok U.S. assets by 75 days, pushing it from the original January enforcement date mandated under a 2024 law. Without a sale to a non-Chinese buyer, TikTok would face a ban in the U.S.
One source said the structure of the deal had largely been finalized by Wednesday. It involved creating a new U.S.-based company, majority-owned and operated by American investors, with ByteDance retaining less than a 20% stake. The deal had secured backing from existing and new investors, ByteDance, and the U.S. government.
'We look forward to working with TikTok and China to close the deal,' Trump said on social media as he extended the TikTok sale deadline by 75 days, which was supposed to have expired on Saturday https://t.co/KoLRhKrrNq pic.twitter.com/n9AmstfIhr
— Reuters (@Reuters) April 5, 2025
However, early Saturday, ByteDance acknowledged that “differences remained” over the agreement.
“(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 stated on its official WeChat account.
ByteDance also noted that,
“In accordance with Chinese law, any agreement is subject to the relevant review procedures.”
When asked about the deal, the Chinese Embassy in Washington reiterated its long-standing position:
“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 the first to report on China’s disapproval of the deal.
President Trump, explaining the extended deadline on social media, said,
“The deal requires more work to ensure all necessary approvals are signed. We hope to continue working in good faith with China, who I understand is not very happy about our reciprocal tariffs.”
Trump recently announced a steep 34% hike in tariffs on Chinese imports, raising the total tariff rate to 54%. China responded with retaliatory measures on Friday. Despite the tensions, Trump said he remained open to easing tariffs in exchange for a successful TikTok deal.
“We look forward to working with TikTok and China to close the deal,” Trump wrote.
“We do not want TikTok to ‘go dark,’” he added.
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The divestment law, signed by former President Joe Biden with strong bipartisan congressional support, had required ByteDance to divest TikTok’s U.S. operations by January 19 or face a ban. However, Trump, who began his second term on January 20, chose not to enforce the law immediately.
The Justice Department informed Apple and Google in January that the law would not be enforced at that time, leading both companies to restore TikTok for new downloads in their app stores.
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Under the current proposal, the U.S. entity would dilute Chinese ownership below the 20% threshold mandated by law, preventing the app’s ban. According to Reuters, the deal would see TikTok’s U.S. business controlled by major non-Chinese investors in ByteDance.
Among the leading parties in the talks are Jeff Yass’ Susquehanna International Group and Bill Ford’s General Atlantic, both of whom are represented on ByteDance’s board. Reuters also reported that Walmart was previously considered a potential investor, but the company has denied reports of its involvement in the deal.
