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Donald Trump has said he will sell the US business of the popular video sharing app and sign an executive order extending the deadline for Bite Dance, the Chinese owner of Tiktok, to avoid a nationwide ban in the US.
The US president said on Friday that he will push the deadline back at 75 days on Saturday on his true social platform, adding that the extension was designed to try to finalize the contract to try to get Tiktok more time.
“This transaction requires more work to ensure that all necessary approvals are signed, so we are signing an executive order to keep Tiktok up and running for another 75 days,” Trump wrote.
Under the law passed in Congress last year, the ordinance required Tiktok to non-Chinese entities until January 19th, but that month Trump issued an order extending the deadline for 90 days. His latest orders extend the deadline for another 75 days.
The White House was approaching establishing parameters for its trading with US investors this week, but those familiar with the issue would have needed time to run fully and Beijing’s approval.
But the process was derailed by Trump’s tariff announcement, people said. China will now try to negotiate tariffs before granting approval, one of the people said. It is unclear whether Beijing is engaged in negotiations over the contract.
A spokesperson for the ordinance said in a statement: “Titktok is currently being discussed with the US government regarding the potential solutions for the US. No agreement has been implemented. There are important issues to be resolved. The contract is approved under Chinese law.”
Trump said he hopes to “continue to work honestly with China,” but added that he is unhappy with the obligations he imposed on Chinese goods imports on Wednesday as part of “mutual tariffs.” China retaliated on Friday with a 34% tariff on US imports.
It is also unclear whether Beijing will allow the sale or whether it will ensure US Group control over the app’s algorithm.
“I don’t want Tiktok to ‘dark’,” Trump added. “We look forward to working with Tiktok and China to close the deal.”
Earlier this week, Trump suggested that he could reduce tariffs on Chinese goods in exchange for Beijing.
The president has been forced to balance security concerns at the heart of the US Tiktok law, which has long been raised by the Chinese Hawks in Congress, and his own success with the platform.
Tiktok did not immediately respond to requests for comment.
Alison Szalwinski, vice-chairman of consulting firm Asia Group, said the extension of the deadline is likely to involve companies that provide cloud and app store services to Tiktoks such as Apple, Google and Oracle for legal reasons.
Without Tiktok sales, the law states that companies distributing or hosting the app will be fined $5,000 per user. “Companies continue to be very unsettled,” Szalwinski said.
The White House is weighing its proposal to spin-off Tiktok from ByteDance, which creates a new company that will create a new US company that will receive fresh US investments to dilute ownership of Chinese investors, those familiar with the issue told the Financial Times earlier this week.
Under the terms of the proposal, people said a new group of investors, including Andreessen Horowitz, Blackstone, Silver Lake and other large private capital groups, would own about half of Tiktok’s US business.
These people added large existing investors in Tiktok, including Atlantic General, Susquehanna, KKR and Kote.
The ordinance holds less than 20% of shares. This would meet the requirement of the Tiktok Act, where only one-fifth of the company is controlled by “foreign enemies.”
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One of the key questions is who controls the required algorithms of Tiktok. One option under discussion will include continuing to develop and operate the algorithm, a central demand for the Chinese government, but the new US group will have access to it through licensing agreements.
But that could raise concerns for Capitol Hill, where many lawmakers argue that China has no control over the algorithm.
Republican lawmakers from the China Commission, who helped pass Tiktok’s law, said Friday that US laws must be followed and that the Chinese Communist Party “cannot access American user data.”
