A deal to spin off the U.S. assets of TikTok was put on hold after China indicated that it would not approve the deal following President Donald Trump's reciprocal tariffs announcement, according to two sources familiar with the matter.
The deal, the structure of which was largely finalized by Wednesday, according to one of the sources, would have spun off TikTok's U.S. operations into a new company based in America and owned and operated by a majority of U.S. investors. ByteDance would hold a minority position of under 20%.
The deal was approved by existing investors, new investors, ByteDance and the U.S. government, the source said.
ByteDance and the White House did not immediately respond to a request for comment. The Chinese Embassy in Washington D.C. also did not immediately reply to request for comment.
"The deal requires more work to ensure all necessary approvals are signed," Trump said on social media, explaining why he was extending the deadline he set in January that was supposed to have expired on Saturday. "We hope to continue working in good faith with China, who I understand is not very happy about our reciprocal tariffs."
China now faces a 54% tariff on goods imported into the United States after Trump announced he was hiking them by 34% this week, prompting China to retaliate on Friday. Trump has said he would be willing to reduce tariffs on China to get a deal done with ByteDance to sell the app used by 170 million Americans.
