WASHINGTON—A high-stakes deal to separate TikTok’s U.S. operations into a new, American-owned company has been put on hold, as rising tensions between Washington and Beijing threaten its approval.
The proposed agreement, which was close to completion earlier this week, would have created a U.S.-based company to manage TikTok’s operations in the country. Under the plan, American investors would hold a controlling interest in the new entity, while ByteDance—the Chinese parent company of TikTok—would retain a minority stake of less than 20%, according to sources familiar with the matter.
The deal had reportedly been approved by current stakeholders, new investors, ByteDance, and the U.S. government. However, it has since been delayed amid concerns that the Chinese government will not sign off, especially after the U.S. announced a sharp increase in tariffs on Chinese goods.
Neither ByteDance nor the White House has issued an official statement regarding the hold-up. The Chinese Embassy in Washington, D.C. also declined to comment.
In a move that could complicate negotiations further, President Donald Trump on Friday extended by 75 days a deadline for ByteDance to sell TikTok’s U.S. operations to a non-Chinese buyer. The original deadline, which would have expired on Saturday, was part of legislation passed in 2024 mandating the sale or risking a nationwide ban of the popular app.
“The deal requires more work to ensure all necessary approvals are signed,” Trump said in a post on social media. “We hope to continue working in good faith with China, who I understand is not very happy about our reciprocal tariffs.”
Earlier this week, the U.S. imposed a 34% hike in tariffs on Chinese imports, bringing the total to 54%. In retaliation, China responded with its own measures on Friday, heightening economic tensions between the two nations.
Despite the strained relationship, Trump has indicated that he remains open to reducing tariffs if it leads to a successful agreement on TikTok’s future in the U.S. The app, which boasts around 170 million American users, has been under intense scrutiny over national security concerns tied to its Chinese ownership.
For now, the future of TikTok in the U.S. remains uncertain as political and economic pressures continue to shape the ongoing negotiations.
