A long-anticipated deal to shift TikTok’s US operations into American hands was nearly sealed, until US President Donald Trump’s sweeping new tariff announcement derailed it, according to sources familiar with the negotiations, reported news agency Associated Press.
The Trump administration had been working for months to secure a plan that would see TikTok spun off into a new, US-based entity, backed by American investors and independent from ByteDance, its Chinese parent.
According to AP, the near-finalised agreement had the backing of ByteDance, US investors, new stakeholders and administration officials. It also included a 120-day closing period to finalise paperwork and financing.
US Vice President JD Vance’s team reportedly played a key role in crafting the deal alongside firms like Oracle and Blackstone.
But on Thursday, just as the White House was preparing to announce a breakthrough, Beijing pulled back.
According to a person familiar with the matter, ByteDance officials told the White House they could not move forward without fresh negotiations over trade and tariffs, following Trump’s announcement of broad global tariffs, including measures directly targeting China.
This sudden policy move appears to have rattled Chinese regulators, leading to a pause in talks and uncertainty over ByteDance’s ability to send a clear signal about the deal’s terms without endangering its standing with Beijing.
The timing of the collapse has sparked questions over whether Trump’s aggressive trade stance unintentionally sabotaged the very deal his administration had spent months pursuing.
The President’s response was to sign an executive order Friday, delaying enforcement of a federal law banning TikTok unless ByteDance divests. The extension grants another 75 days, pushing the new deadline to mid-June.
“My Administration has been working very hard on a Deal to save TikTok… which is why I am signing an Executive Order to keep TikTok up and running for an additional 75 days,” Trump posted on Truth Social.
While Trump framed it as an extension, critics argue it’s more of a legal bypass. “He’s not extending anything,” law professor Alan Rozenshtein told AP. “All he’s doing is saying that he will not enforce the law for 75 more days. The law is still in effect.”
ByteDance confirmed talks were ongoing but warned that “any agreement will be subject to approval under Chinese law.”
Analysts say the heart of the deal remains the control of TikTok’s powerful algorithm.
Cybersecurity expert Chris Pierson told AP that as long as ByteDance retains that control, “the underlying risks” remain unchanged.
