A proposed deal to divest the U.S. operations of TikTok has been formally put on hold after the Chinese government indicated it would not grant the necessary approvals in response to President Donald Trump’s recent announcement of a significant increase in tariffs on Chinese imports.
The proposed agreement, which had reached an advanced stage by midweek, would have established a new U.S.-based company to oversee TikTok’s operations in the country. U.S. investors would maintain control over the proposed entity through their substantial ownership distribution, while ByteDance would retain a stake of less than 20%.
Before ByteDance is subject to a ban from the provisions of the 2024 law, the extension granted by Trump for U.S. asset divestiture must be completed within 75 days. The initial enforcement deadline for January was initiated by U.S. President Donald Trump; however, it was postponed as he began his second presidential term.
“The deal requires more work to ensure all necessary approvals are signed,” Trump said on social media. “We hope to continue working in good faith with China, who I understand is not very happy about our reciprocal tariffs.”
This week, Trump implemented an additional 34% tariff on Chinese products, resulting in a total of 54%. Beijing responded by implementing countermeasures. The tariffs have made the TikTok negotiations more difficult, prompting China to express their reluctance to sanction the deal due to the escalating trade disputes.
ByteDance confirmed early Saturday that the two sides remain far apart. “(We are) still in talks with the US government, but no agreement has been reached, and the two sides still have differences on many key issues,” the company said in a statement posted on its official WeChat account.
“In accordance with Chinese law, any agreement is subject to the relevant review procedures,” the company added.
The Chinese Embassy in Washington, when asked for comment on the status of the deal, 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 the first to report China’s disapproval of the deal.
Before China expressed its disapproval, the agreement was affirmed by multiple sources who were involved in the negotiations to have received support from ByteDance, all current investors, prospective new investors, and the U.S. government.
In 2024, the U.S. Congress passed legislation that mandated ByteDance to sell its TikTok U.S. assets. Failure to do so would have resulted in a ban due to national security concerns associated with the Chinese government’s access to data and covert influence operations. The bill was formally approved by President Joe Biden, who supported it with bipartisan support from the entire Congress.
After assuming the presidency on January 20, Trump postponed the enforcement of the law’s enforcement deadline for January 19. The enforcement of the law would not proceed, as Apple and Google received official notice in January from the Justice Department. This allowed TikTok to remain active on their stores. The new deadline set by Trump extends the divestiture period into mid-June.
“We look forward to working with TikTok and China to close the deal,” Trump wrote Friday. “We do not want TikTok to ‘go dark’.”
The proposed agreement between U.S.-based investors includes both Jeff Yass from Susquehanna International Group and Bill Ford from General Atlantic. The objective is to acquire control of TikTok’s U.S. operations through an expanded interest purchase. This proposal would reduce Chinese control of the company to levels that fall below the 20% threshold established by U.S. law.
A recent report indicated that Walmart considered joining the investor organisation, despite the company’s formal denial of membership.
ByteDance and the White House did not provide official comment at the time of publication. The Chinese Embassy in Washington also did not issue an immediate response.