In an ongoing saga over national security concerns, President Donald Trump has once again postponed the deadline for ByteDance to divest TikTok's U.S. operations.
CNBC confirmed reports from the White House that President Trump extended ByteDance's deadline to sell off TikTok's U.S. business to mid-June amid regulatory complexities.
The original deadline set for ByteDance, under a national security law enacted in April 2024, was April 5.
This law imposes severe penalties on internet providers and app stores that facilitate TikTok's operations in the U.S., aiming to mitigate potential security risks associated with the China-based company.
When the initial April deadline proved unfeasible, Trump granted ByteDance a 75-day extension, moving the deadline to mid-June. This extension was motivated by the need for more thorough review and approval processes by both U.S. and Chinese authorities.
Trump, communicating through Truth Social, emphasized that additional time was required to finalize all necessary regulatory approvals. He noted the complexity of the deal, stating it "requires more work to ensure all necessary approvals are signed."
ByteDance has been under scrutiny, with the U.S. government demanding that it divest its American operations of TikTok to a U.S. company. T
his move seeks to address concerns that the app could be used for Chinese espionage or to influence American public opinion.
The deal has attracted significant interest from major companies, including Oracle, AppLovin, Amazon, and a consortium of heavy hitters like Andreessen Horowitz and Blackstone. Additionally, smaller entities like Project Liberty and Perplexity are also vying for a piece of TikTok's profitable U.S. market.
A major complicating factor in the negotiations has been the need for approval from the Chinese government. All potential transactions are subject to Chinese laws, which can delay or derail deals involving domestic companies' overseas operations.
The backdrop of U.S.-China trade relations has also influenced negotiations. Following a policy of reciprocal tariffs, Trump imposed a 54% total tariff on China, which he has hinted could be reduced to facilitate the TikTok deal. This suggests a strategic use of tariffs as both a bargaining tool and a means to address broader economic and security issues.
The ByteDance spokesperson has admitted that while progress has been made, "an agreement has not been executed" and there are still "key matters to be resolved." This indicates ongoing complexities in discussions that extend beyond mere financial negotiations.
President Trump has remained vocal about the strategic importance of tariffs, expressing hopes to maintain TikTok's operation in the U.S. without compromising national security.
He stated this proves that "Tariffs are the most powerful economic tool, very important to our National Security!"
U.S. Vice President JD Vance optimistically remarked about reaching a high-level agreement that addresses national security concerns, suggesting the future operation of a distinctly American TikTok enterprise.
As discussions continue, the extended deadline offers a brief respite, allowing all parties involved to refine the terms and conditions of the potential deal. Both the U.S. and China are keenly aware of the economic and political stakes involved, making this negotiation particularly complex.