An attempted deal between US President Donald Trump and TikTok’s Chinese parent company, ByteDance, to avoid a US ban on the app fell apart after China declined to approve the deal in response to Trump’s new tariffs, Bloomberg reports.
On Wednesday, U.S. authorities were poised to finalize a deal requiring ByteDance to reduce its stake in TikTok’s U.S. operations to below 20%, in line with legislation requiring divestments or bans.
The plan included the creation of a U.S.-based entity that would be majority-owned by American investors, and Trump was ready to sign an executive order giving the company 120 days to complete the transaction before the April 5 deadline, according to the source. However, a consensus was never reached.
“The market reaction speaks volumes: the US-initiated tariffs and the global trade war are unpopular and will only cause unrest and instability,” Chinese Foreign Ministry spokesman Lin Jian said Saturday.
U.S. Extends TikTok Sale Deadline
In April 2024, then-US President Joe Biden signed a law giving ByteDance 270 days to sell TikTok. Faced with a stalemate in the talks, Trump extended this deadline by 75 days on Friday, expressing his desire to close the deal so that TikTok wouldn’t be left in the dark. ByteDance, for its part, confirmed the ongoing negotiations but stressed that “there are key issues to be resolved” and that any deal must comply with Chinese law.
The attempted agreement fell apart after Trump announced reciprocal tariffs, with China among the countries most affected by the increased levies. Tariffs on the Asian giant rose to 54% from an existing 20%. Amid the uncertainty generated by these mega-tariffs and China’s trade counterattack, Wall Street closed this Friday experiencing its worst day since the crisis caused by the COVID-19 pandemic in 2020.