The fate of Chinese video-sharing app TikTok’s U.S. operations is caught in the crossfire of the U.S.-China tariff war. The deal regarding the sale of TikTok’s U.S. operations was set to finalize before April 5, the deadline for the 75-day extension granted by U.S. President Donald Trump. However, following the hefty tariffs imposed on China during “Liberation Day,” China has backed out of making a deal with the U.S. administration.
Trump’s Escalated Tariffs Draw China’s Ire
Interestingly, the structure of the potential deal was almost certain, with TikTok’s U.S. operations being spun off into a separate U.S.-based entity. Parent company ByteDance would own less than 20% of the new entity, while the majority of the ownership would be held by American investors. Reports suggest that this structure had already been approved by TikTok’s existing investors, new investors, ByteDance, and the Trump administration.
Trump imposed cumulative tariffs of 54% on Chinese imports, the highest on record among his latest reciprocal tariffs on major countries. This drew the ire of the Chinese government, which retaliated with additional 34% tariffs on U.S. goods imported to China. Meanwhile, the President signed an executive order on April 5, extending TikTok’s deadline for another 75-days, thus keeping the short-form video app alive in the U.S. Trump remains confident that a deal to “Save TikTok” will be made during the extension period.
Notably, the app stores of both Apple (AAPL) and Alphabet’s (GOOGL) Google will continue to keep the TikTok app running in the U.S., following the further extension of the ban. According to Bloomberg, Attorney General Pam Bondi sent an email to iPhone maker Apple, informing the company to comply with President Trump’s executive order extending TikTok’s ban. In the meantime, Trump spoke to reporters on Sunday, onboard Air Force One, calling the tariffs as a “medicine” required to “fix something.” Notably, more than 50 countries have approached the White House for negotiations on the tariffs, but Trump insists that there will be no talks “unless they pay us a lot of money on a yearly basis.”
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