TikTok US spin-off deal stalls as China pushes back after Trump’s tariff hike

Trump extends ByteDance deadline by 75 days amid ongoing US-China tensions

A planned deal to spin off TikTok’s US operations into a separate, American-owned entity has been put on hold following indications that the Chinese government would not approve the transaction. The delay follows President Donald Trump’s announcement of increased tariffs on Chinese imports earlier this week, according to two sources familiar with the matter.

On Friday, Trump extended the deadline for ByteDance—the Chinese parent company of TikTok—to sell its US assets by 75 days. The previous deadline, based on a 2024 law, was set to take effect in January and would have banned the app unless it was sold to a non-Chinese buyer.

Deal structure and approvals

According to one source, the deal’s structure had been mostly finalized by Wednesday. It proposed the creation of a new US-based company that would operate TikTok’s US assets, with US investors owning a majority stake. ByteDance’s holding would be capped at under 20%.

The proposal had already received approval from existing and new investors, ByteDance, and the US government. However, Chinese approval remains a major hurdle, and officials in Beijing have not signaled willingness to authorize the sale.

When asked about the TikTok deal, the Chinese Embassy in Washington reiterated its stance: “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.”

TikTok declined to comment on the situation.

Tariffs complicate negotiations

Trump’s recent decision to raise tariffs by 34% on Chinese imports, increasing total tariffs to 54%, has heightened tensions. China has responded with retaliatory measures. Trump acknowledged China’s dissatisfaction with the tariffs in a social media post explaining the deadline extension, noting, “We hope to continue working in good faith with China.”

Despite the uncertainty, Trump emphasized the importance of maintaining access to TikTok for American users. “We do not want TikTok to go dark,” he stated.

Legislative and regulatory background

The current legislation mandating TikTok’s sale passed with bipartisan support and was signed into law by then-president Joe Biden in 2024. The law required ByteDance to divest TikTok’s US operations by January 19, 2025. Trump, who began his second term on January 20, chose not to enforce the deadline. Consequently, the Justice Department informed Apple and Google in January that it would not enforce the law, leading to TikTok’s return to app stores.

Possible buyers and investor talks

The White House is currently engaging in talks centered on increasing US investor stakes in ByteDance to facilitate the spin-off. The proposal aims to bring Chinese ownership below the 20% threshold required by US law.

Major ByteDance investors involved in the negotiations include Jeff Yass’ Susquehanna International Group and Bill Ford’s General Atlantic, both represented on ByteDance’s board.

Although earlier reports suggested Walmart might join the group of investors, the company has since denied involvement.

Next steps

Trump’s new order sets a mid-June deadline for finalizing the deal. However, without China’s approval, the path forward remains uncertain. The White House continues to seek a resolution that satisfies both national security concerns and market stability.

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