Source insiders said that after Trump imposed taxes on China, TikTok deal was shelved.

According to a report by Reuters citing two sources familiar with the matter, after U.S. President Trump announced reciprocal tariffs on China this week, China said it would not approve the divestiture of TikTok's U.S. assets, thus shelving the deal.

Trump extended the "ban or sell" deadline for TikTok by 75 days on Friday, requiring ByteDance to sell the popular short video application's U.S. assets to non-Chinese buyers, otherwise it would face a ban that should have taken effect in January under last year's law.

One of the aforementioned sources familiar with the matter said that the structure of the deal had been largely finalized on Wednesday, which would involve splitting TikTok's U.S. operations into a new company headquartered in the U.S., with most equity owned and operated by American investors. ByteDance would hold less than 20% of the shares in the new company. This source said that the transaction plan has been approved by existing investors, new investors, ByteDance, and the U.S. government.

Saturday morning, the WeChat public account "ByteDance" released a statement saying, "ByteDance is still negotiating with the U.S. government and no agreement has been reached. There are still differences on many key issues. According to Chinese laws and regulations, any agreement must go through relevant review procedures."

In response to inquiries about the status of the TikTok deal, the Chinese Embassy in the United States replied in a statement, "China has stated its position on TikTok on multiple occasions. China consistently respects and protects the legitimate rights and interests of enterprises and opposes practices that violate market economic principles."

APN was the first to report China's disagreement. On Friday, Trump wrote on social media, "The agreement requires more work to ensure all necessary approvals are signed," and explained why he extended the deadline he set in January, which was due to expire on Saturday.

"We hope to continue sincere cooperation with China. As far as I know, China is not very satisfied with our 'reciprocal tariff.' This proves that tariffs are the most powerful economic tool and are very important to our national security!"

The Trump administration announced a 34% reciprocal tariff on China on Wednesday, raising the total tax rate on Chinese goods entering the U.S. to at least 54%. In response, China took a series of countermeasures on Friday. Trump had indicated that he was willing to reduce tariffs on China to facilitate the TikTok deal, which has 170 million American users.

Trump said his administration was in contact with four different groups regarding the potential TikTok deal. However, he did not disclose the identities of these organizations. The TikTok U.S. business deal requires approval from the Chinese government. Authorities have not publicly committed to allowing ByteDance to sell TikTok, and Trump's remarks indicate that China has once again expressed opposition.

On Friday, Trump also wrote, "We do not want TikTok to be delisted. We look forward to cooperating with TikTok and China to complete the deal." Trump's new executive order will set a deadline of mid-June for reaching an agreement.

According to a Reuters report, the negotiations led by the White House over TikTok's future are focusing on a plan where ByteDance's largest non-Chinese investor will increase its stake and acquire the application's U.S. business.

Insiders told Reuters that this plan requires separating TikTok into a U.S. entity and diluting China's stake in the new business to below the 20% threshold stipulated by U.S. law, thereby rescuing TikTok from the looming U.S. ban.

Original article: https://www.toutiao.com/article/1828576757031948/

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