The TikTok deal was derailed as China opposed Trump’s tariffs

Trump delays TikTok ban as China resists tariffs; complexities grow.

: US President Donald Trump postponed the TikTok sale deadline by 75 days, amid tariff disputes with China that hindered agreement progress. ByteDance stated discussions with the US government are ongoing, with no final deal yet. The delay underscores TikTok's uncertain US future and its role in broader US-China trade issues. Interest from potential US investors like Oracle and BlackRock persists as TikTok tries to resolve security concerns.

In a recent development, US President Donald Trump announced a 75-day enforcement delay on the mandate requiring ByteDance, TikTok's parent company, to divest its US operations. The extension was declared just one day before the order was set to be enacted. This postponement follows Trump's earlier announcement of tariffs against China, a factor believed to have complicated and potentially obstructed a near-finalized agreement to transfer TikTok to US ownership. ByteDance has issued a statement via Weibo asserting that conversations with US authorities are ongoing and no conclusive agreement has been reached.

The significance of this delay lies in its reflection of continued ambiguity regarding TikTok's fate in the US amid the broader geopolitical tensions between Washington and Beijing. Former President Trump highlighted the connection between the TikTok negotiations and the tariff discussions, thereby adding a layer of complexity to what would traditionally be a straightforward tech transaction. This situation shows that the TikTok deal is being wielded as leverage in broader US-China trade negotiations. Trump's Truth Social statement claims significant progress in safeguarding TikTok's US presence but acknowledges that further work is required to secure comprehensive approval.

Details emerging from reliable news sources like CNN have disclosed that the negotiations previously approached a resolution, with plans for TikTok's US operations to emerge as a new entity. This arrangement would have US investors holding the majority stake while ByteDance retained a minority share below 19.9%, aligning with legal compliance requirements. While Oracle and BlackRock surfaced as potential investors, interest was reportedly also expressed by Amazon, Frank McCourt, and the OnlyFans founder. Trump's administration, while returning to Washington from Florida, attributed the disruption of the deal to China's tariff-influenced decision.

An examination of ByteDance's ownership reveals it currently stands with 60% of its shares distributed across global institutional investors, including BlackRock, General Atlantic Investment Group, and Susquehanna. The ownership is rounded out by 20% held by Chinese founders and 20% controlled by employees, American workers included. To address the stand-off, TikTok has initiated several strategies designed to mitigate US national security concerns. Efforts include forming the USDS, a company dedicated to the management of American user data, and launching projects Clover and Texas aimed at data segregation and security respectively. Each of these projects carries an estimated overhead of approximately $1 billion annually.

Concurrently, TikTok has secured Oracle’s services as its designated technology provider on US soil. This alliance grants Oracle the responsibility to manage security assessments of TikTok’s US-based source code, a pivotal step in quelling security apprehensions. Despite these proactive measures and assurances by ByteDance about localized data storage under Oracle’s oversight, skepticism from US political circles persists, complicating the path forward for TikTok.

Sources: TechNode, CNN, ByteDance statements, Truth Social posts.

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