Deal To Get TikTok Out Of CCP’s Control Exploded After ‘Liberation Day’ Tariffs: Source

The Trump administration had a deal in place earlier this week to finalize the sale of TikTok, but the agreement fell apart after the massive tariffs announced by President Donald Trump on Wednesday took effect, according to a source familiar with the matter.

After several months of negotiations involving ByteDance, prospective buyers and Vice President J.D. Vance, a deal had been reached as of Wednesday that would have seen TikTok’s American operations spun off into a new U.S.-based entity owned by a majority of American investors, the source told the Daily Caller News Foundation. However, by Friday, the deal had fallen apart because TikTok came to believe that Chinese regulators would not sign off on the agreement in the absence of further trade negotiations pertaining to the tariffs the Trump administration slapped on China on Wednesday afternoon, according to the source. (RELATED: Trump Kicks TikTok Can Down Road For 75 More Days As American Firms Vie For App)

A hand holding an iPhone with the TikTok app displaying a message stating “Sorry, TikTok Isn’t Available Right Now”, referencing a US law that effectively banned the app, and expressing optimism that Donald Trump would restore access, above a light wooden background, Lafayette, California, January 18, 2025. (Photo by Smith Collection/Gado/Getty Images)

The scuttled deal had the buy-in of existing and new investors, the federal government and ByteDance itself, according to the source familiar.

Trump extended the window for a deal to be made by 75 days via executive action on Friday, just one day before an initial 75 day extension period was set to expire on Saturday. The popular social media app was to be banned in the U.S. unless it could be sold to non-Chinese buyers under the terms of a law signed by former President Joe Biden in 2024. Concerns that the app is actually controlled by or accessible to the Chinese Communist Party (CCP) motivated lawmakers on both sides of the aisle to move against ByteDance.

By Friday morning, it was not known if stakeholders could publicly announce that a tentative agreement had been reached because the Chinese government’s outlook had changed, and that change created uncertainty for TikTok in its own dealings with Chinese regulators, the source told the DCNF. ByteDance officials notified the White House on Thursday that the Chinese government would not approve the agreement until Chinese officials could enter trade talks with the U.S.

Up until the tariffs snapped into place, available evidence and expectations indicated that Chinese regulators would sign off on the tentative agreement, the source told the DCNF.

In the scuttled structure, ByteDance would have still maintained a minority ownership stake in the spun off entity, according to the source, and the initial law that began the saga allows for ByteDance to do so as long as its stake is below 20%. It was expected that Trump would officially approve the deal with an executive order that would have created a 120-day period to handle financing, the source told the DCNF.

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