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President Donald Trump has indicated the possibility of reducing tariffs on Chinese goods if China permits ByteDance, TikTok’s Chinese parent company, to sell the video-sharing app and prevent a US ban. During a conversation aboard Air Force One, Trump mentioned that China might propose a deal approval if the US provides some concession on tariffs, emphasizing that the tariffs offer significant negotiation leverage.
This statement followed Trump’s announcement of “reciprocal” tariffs on numerous nations, including a 34 percent tariff on imports from China, which added to a 20 percent tariff imposed earlier in the year. Trump further commented that an agreement with “multiple investors” that would allow TikTok to continue its operations in the US was almost finalized. Congress had previously passed legislation requiring ByteDance to divest TikTok or face a nationwide ban, with Trump extending the divestment deadline until Saturday.
The legislation was intended to address security concerns regarding potential Chinese governmental influence over TikTok’s algorithm. There were also concerns that ByteDance’s ownership might allow Beijing to access the personal data of millions of Americans. According to Trump, a resolution involving a reputable group seems imminent.
Vice President JD Vance shared on Fox News that the deal would be revealed before the deadline. The White House held talks this week to formulate a deal acceptable to Republicans, ByteDance, and the Chinese government, which would need to approve it. The administration is considering a proposal to separate TikTok from its Chinese parent company, creating a new US entity with fresh American investments to reduce the stakes of Chinese investors.
Under this proposal, new external investors, including firms like Andreessen Horowitz, Blackstone, and Silver Lake, would acquire approximately half of TikTok’s US business. Existing large investors such as General Atlantic, Susquehanna, KKR, and Coatue would retain 30 percent of the US entity, while ByteDance would hold just under a 20 percent stake. This arrangement complies with US law, which mandates that no more than a fifth of the company is controlled by a “foreign adversary.” Oracle is set to provide data security services.
One major issue remains the control of TikTok’s algorithm. Discussions include ByteDance continuing algorithm development and operation, with the new US group accessing it through a licensing agreement. Hawkish China commentators and legal scholars argue that full operational control of the algorithm should reside within the US entity to comply with legislation. Several former members of the Trump administration, such as Secretary of State Marco Rubio and National Security Adviser Mike Waltz, opposed allowing China to retain operational control of the app.
The Chinese embassy in Washington did not comment on the matter, and ByteDance has yet to respond to requests for comment.
