A deal to spin off TikTok’s US operations has been put on hold after China signaled it would not approve the arrangement in light of President Donald Trump’s recent tariff announcement, according to two sources familiar with the matter.
Under the proposed deal—nearly finalized by Wednesday—TikTok’s US assets would have been separated into a new US-based company, with ByteDance retaining less than a 20% stake while US investors assumed majority control. The transaction had received approvals from existing and new investors, ByteDance, and the US government.
However, following Trump’s announcement to extend the deadline for ByteDance to divest its US assets by 75 days, China indicated it would block the deal. In response, ByteDance stated on its official WeChat account that discussions with the US government are still ongoing but that key differences remain.
The company said, “(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. In accordance with Chinese law, any agreement is subject to the relevant review procedures.”
The Chinese Embassy in Washington, when asked about the deal, stated, “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 first reported China’s disapproval.
Trump explained his decision on social media, saying, “We hope to continue working in good faith with China, who I understand is not very happy about our reciprocal tariffs.” He added that if ByteDance does not complete the sale to a non-Chinese buyer by the new mid-June deadline, the ban—originally slated to take effect in January under a 2024 law—will be enforced.
This new order comes as the White House-led discussions on TikTok’s future are centering on a plan for major non-Chinese investors to increase their stakes and acquire the app’s US operations, ensuring Chinese ownership is diluted to below 20%, thereby rescuing the app from a looming US ban. While reports suggested involvement from groups such as Jeff Yass’ Susquehanna International Group and Bill Ford’s General Atlantic, Walmart has denied any interest in joining the investor group.
