TikTok’s US Spin-Off Deal Stalled as China Responds to Trump’s Tariffs

A major deal to spin off the U.S. operations of TikTok has been delayed, according to sources familiar with the matter, following an indication from China that it would not approve the agreement. The decision to postpone the deal comes after former President Donald Trump announced reciprocal tariffs, which appear to have influenced Beijing’s stance.

“My Administration has been working very hard on a Deal to SAVE TIKTOK, and we have made tremendous progress. The Deal requires more work to ensure all necessary approvals are signed,” Trump wrote in a post on Truth Social, addressing the ongoing negotiations. The former president’s remarks came just one day before a potential ban on the app was set to go into effect, which had previously been delayed by 75 days when he took office in January.

Per Reuters, the spin-off deal, which had largely been finalized by Wednesday, would have transferred TikTok’s U.S. operations into a new company based in the United States. Under the proposed structure, a majority of the new entity would have been owned by U.S. investors, with ByteDance, TikTok’s parent company, retaining a minority stake of less than 20%. The deal had received approval from current and new investors, ByteDance, and the U.S. government, according to one source.

Read more: Oracle Weighs National Security Risks in TikTok’s US Operations Sale

However, following the recent tariffs announcement by Trump, the Chinese government indicated that it would not give the necessary approval for the deal to move forward. As a result, the spin-off arrangement, which was expected to resolve national security concerns about the app’s data practices, is now on hold.

Despite the setback, Trump took steps to delay enforcement of the ban. On Friday, he signed an executive order formalizing the postponement, as confirmed by a source familiar with the matter. The U.S. government, ByteDance, and the Chinese Embassy in Washington did not immediately respond to requests for comment.

As of now, it remains unclear how the situation will unfold, with ongoing diplomatic and regulatory negotiations expected to determine the future of TikTok’s U.S. operations. The delay marks the latest chapter in the long-standing tensions surrounding the app’s security concerns and its ownership structure.

Source: Reuters