A PYMNTS Company

US Warns TikTok Could Face Shutdown Without Chinese Approval of Sale Deal

By  |  July 24, 2025

TikTok could be forced to cease operations across the United States if China refuses to approve an ongoing proposal for the sale of its U.S. operations, according to U.S. Commerce Secretary Howard Lutnick. In comments made Thursday during an appearance on CNBC, Lutnick emphasized the need for American ownership and control over the app’s algorithm, which powers the content distribution of the platform used by roughly 170 million Americans.

    Get the Full Story

    Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.

    yesSubscribe to our daily newsletter, PYMNTS Today.

    By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions.

    Per Reuters, Lutnick stated that while China or ByteDance — TikTok’s current parent company — might be allowed to retain a small stake, the U.S. must ultimately hold the reins when it comes to the platform’s underlying technology and decision-making systems.

    “If that deal gets approved, by the Chinese, then that deal will happen. If they don’t approve it, then TikTok is going to go dark, and those decisions are coming very soon,” Lutnick said.

    The potential shutdown hinges on a high-stakes sale agreement that has been under negotiation for months. A proposed plan earlier this year would have carved out TikTok’s U.S. assets into a new entity majority-owned by American investors. However, according to Reuters, those talks were derailed after Beijing pushed back on the deal, particularly following former President Donald Trump’s announcements of additional tariffs targeting Chinese imports.

    Read more: Private Equity Firm Blackstone Exits TikTok US Buyout Talks

    Trump, who signed into law a measure requiring ByteDance to divest TikTok’s U.S. operations by January 19, 2024, has already extended the deadline three times. The most recent extension, issued last month, gives the companies until September 17 to finalize a deal.

    Despite the law’s mandate, enforcement has remained in limbo. The U.S. Department of Justice recently made public letters from Attorney General Pam Bondi to Apple, Google, and other digital service providers, reassuring them they would not face legal consequences for continuing to support TikTok. As Reuters noted, Bondi’s communications cited Trump’s judgment that a sudden ban could disrupt his administration’s ability to manage national security and foreign relations.

    The political and legal uncertainty surrounding the matter has fueled criticism from some Democratic lawmakers, who argue that Trump lacks the authority to delay the law’s implementation. They also question whether the current structure of the proposed deal would fulfill the legal obligations set by Congress.

    Source: Reuters