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Former President Donald Trump has indicated the possibility of reducing tariffs on Chinese imports if Beijing permits ByteDance, TikTok’s Chinese parent company, to divest the popular video-sharing platform to prevent a ban in the United States.
“We are in a situation with TikTok where China is likely to agree to a deal if we make some concessions on tariffs,” Trump remarked while aboard Air Force One. “The tariffs provide us with significant leverage in negotiations.”
This statement followed Trump’s recent imposition of “reciprocal” tariffs on several countries, including a 34 percent tax on imports from China, which built on a previous 20 percent tariff introduced earlier this year.
Trump stated that his administration was “very close” to finalizing a deal with “multiple investors” that would enable TikTok to operate in the US. Last year, Congress enacted legislation mandating ByteDance to divest its ownership of TikTok or risk a nationwide ban. Trump extended the divestment deadline to Saturday.
Legislators enacted this law due to security apprehensions about potential influence from the Chinese government over TikTok’s algorithm. Security experts also voiced concerns that ByteDance’s ownership could allow Beijing access to the personal data of countless Americans.
“We’re on the verge of finalizing a deal with an excellent group of people,” Trump mentioned.
Earlier on Thursday, Vice President JD Vance told Fox News that the agreement would “be announced before the deadline.”
This week, the White House engaged in discussions to outline a deal that would meet the approval of Republicans, as well as ByteDance and the Chinese government, which would need to provide its consent.
The administration is considering a plan to separate TikTok from its Chinese parent company, creating a new US entity that would involve fresh American investment to reduce the stake held by Chinese investors, according to sources familiar with the talks.
Under this proposal, new external investors such as Andreessen Horowitz, Blackstone, Silver Lake, and other major private equity firms would own approximately half of TikTok’s US operations. Significant current investors in TikTok, like General Atlantic, Susquehanna, KKR, and Coatue, would possess about 30 percent of the US entity, while ByteDance would retain just below a 20 percent stake.
This structure would comply with US regulations stipulating that no more than 20 percent of the company could be controlled by a “foreign adversary.” Oracle would also be involved, providing data security for the enterprise.
One significant point of contention remains regarding the control of TikTok’s highly valuable algorithm. A potential option under deliberation is for ByteDance to continue developing and managing the algorithm — which has been a crucial demand from the Chinese government — while the new US entity could gain access through a licensing agreement. However, critics, including hardliners and legal scholars, have argued that the algorithm must be entirely managed by the US entity to comply with the legislation’s stipulations. Several former members of the Trump administration, including Secretary of State Marco Rubio and National Security Advisor Mike Waltz, actively opposed any arrangement that would allow China to maintain control over the application during their time in Congress.
The Financial Times reached out to the Chinese embassy in Washington for remarks. A representative from ByteDance did not promptly respond to a request for comment.
