Ultimately, it was Donald Trump, the guy who wanted to avoid wasting TikTok, who may perhaps totally kill the short-video app from remaining within the US, On The Money has learned.
On Wednesday, Trump hit China, the very country that controls TikTok, with a 145% tariff on all imported goods since it “imprudently decided to retaliate against america” with an 84% tax.
With Trump now singling out just China for his trade war while pausing it for the remainder of the world, the grueling TikTok negotiations have come to a standstill that may likely be difficult to beat, individuals with direct knowledge of the matter say.
The explanation is that the TikTok deal isn’t a straightforward M&A transaction. It’s closer to a geo-political, multi-layered boondoggle.
The app, technically owned by Chinese tech company Bytedance but controlled by Bejing, all the time needed approval from the Communist regime to be sold to a brand new company with majority US ownership.
Trump’s U-turn on reciprocal tariffs Wednesday that put the trade war on pause for the whole world except China is making a deal all but inconceivable, sources told On The Money.
“The Chinese don’t like losing face in public, so this deal is dead,” said one Wall Street executive with direct knowledge of the negotiations.
One other person involved within the discussions said, “Now they (the Chinese) won’t sell. That’s needless to say.”
Trump himself was only a bit more sanguine when asked Wednesday how the China-trade contretemps will impact a TikTok deal.
“We’re going to need to wait to see what’s going to occur with China,” he said.
TikTok’s future within the US has been in limbo since Trump took office in January.
His first 75-day extension ended last week with out a deal in place, so Trump enacted one other 75-day extension. Which means TikTok can still operate within the US as deal team members – big institutional investors, the White House and the Chinese — can finalize a structure that relinquishes Chinese control of TikTok but in a way that Bytedance and the Chinese government can live with.
One other issue throwing doubt on TikTok’s survival within the US is that it might be legally difficult for Trump to maintain extending that all-important deadline to comply with the law.
Meanwhile, if some form of trade take care of China is reached, Chinese President Xi may not wish to do the Trump administration a solid and comply with terms since TikTok will remain globally essential even when it’s banned within the US.
“Is Trump just going to maintain issuing extensions? Possibly, but which may not be legal, and Xi doesn’t appear to be within the mood to strike a deal on TikTok given what happened Wednesday,” said the Wall Street executive with knowledge of the negotiations.
The Chinese wanted a minority stake in the brand new US company; additionally they don’t wish to sell TikTok’s crown jewel – its technology, the algorithm that funnels videos based on preferences to users, which lawmakers claim may be used to spy on US residents.
The Chinese have long denied the spying issue, but US lawmakers remain concerned even with the brand new structure over whether it provides enough protection from alleged spycraft. That’s one reason it took so long to provide you with a structure that satisfied all of the competing constituencies.
TikTok seems small potatoes given the considerable issues that each side have to iron out from tariffs to varied other trade barriers. Treasury Secretary Bessent said the administration is weighing delisting Chinese stocks from US exchanges, which can add more fuel to the trade inferno.
Ultimately, it was Donald Trump, the guy who wanted to avoid wasting TikTok, who may perhaps totally kill the short-video app from remaining within the US, On The Money has learned.
On Wednesday, Trump hit China, the very country that controls TikTok, with a 145% tariff on all imported goods since it “imprudently decided to retaliate against america” with an 84% tax.
With Trump now singling out just China for his trade war while pausing it for the remainder of the world, the grueling TikTok negotiations have come to a standstill that may likely be difficult to beat, individuals with direct knowledge of the matter say.
The explanation is that the TikTok deal isn’t a straightforward M&A transaction. It’s closer to a geo-political, multi-layered boondoggle.
The app, technically owned by Chinese tech company Bytedance but controlled by Bejing, all the time needed approval from the Communist regime to be sold to a brand new company with majority US ownership.
Trump’s U-turn on reciprocal tariffs Wednesday that put the trade war on pause for the whole world except China is making a deal all but inconceivable, sources told On The Money.
“The Chinese don’t like losing face in public, so this deal is dead,” said one Wall Street executive with direct knowledge of the negotiations.
One other person involved within the discussions said, “Now they (the Chinese) won’t sell. That’s needless to say.”
Trump himself was only a bit more sanguine when asked Wednesday how the China-trade contretemps will impact a TikTok deal.
“We’re going to need to wait to see what’s going to occur with China,” he said.
TikTok’s future within the US has been in limbo since Trump took office in January.
His first 75-day extension ended last week with out a deal in place, so Trump enacted one other 75-day extension. Which means TikTok can still operate within the US as deal team members – big institutional investors, the White House and the Chinese — can finalize a structure that relinquishes Chinese control of TikTok but in a way that Bytedance and the Chinese government can live with.
One other issue throwing doubt on TikTok’s survival within the US is that it might be legally difficult for Trump to maintain extending that all-important deadline to comply with the law.
Meanwhile, if some form of trade take care of China is reached, Chinese President Xi may not wish to do the Trump administration a solid and comply with terms since TikTok will remain globally essential even when it’s banned within the US.
“Is Trump just going to maintain issuing extensions? Possibly, but which may not be legal, and Xi doesn’t appear to be within the mood to strike a deal on TikTok given what happened Wednesday,” said the Wall Street executive with knowledge of the negotiations.
The Chinese wanted a minority stake in the brand new US company; additionally they don’t wish to sell TikTok’s crown jewel – its technology, the algorithm that funnels videos based on preferences to users, which lawmakers claim may be used to spy on US residents.
The Chinese have long denied the spying issue, but US lawmakers remain concerned even with the brand new structure over whether it provides enough protection from alleged spycraft. That’s one reason it took so long to provide you with a structure that satisfied all of the competing constituencies.
TikTok seems small potatoes given the considerable issues that each side have to iron out from tariffs to varied other trade barriers. Treasury Secretary Bessent said the administration is weighing delisting Chinese stocks from US exchanges, which can add more fuel to the trade inferno.
