In a clear show of geopolitical leverage, China has successfully stalled the forced sale of TikTok’s U.S. operations, pushing back against what many view as a politically motivated and erratic campaign by the United States.
Despite months of pressure, legal threats, and legislative maneuvering by the U.S. government, the sale has once again been delayed — a move that underscores how little strategic clarity Washington has in handling the TikTok saga.
The deal to spin off TikTok’s U.S. assets into a new, American-controlled company was finalized and backed by ByteDance, U.S. investors, and government officials, Reuters news report said. However, the entire process was abruptly paused after Beijing signaled it would not approve the transaction — a move made shortly after President Donald Trump escalated tariffs on Chinese imports to 54 percent.
Once again, the U.S. has shown that its policy toward TikTok is more reactive than strategic, shifting timelines, priorities, and enforcement depending on political convenience. The law requiring ByteDance to divest TikTok’s U.S. assets by January 2025 was passed with overwhelming bipartisan support and signed into law, only for Donald Trump to extend the deadline by 75 days without enforcing it.
This sudden change of course suggests that the U.S. government’s threats of a TikTok ban are more bluster than bite, especially when faced with real resistance from China. Despite citing “national security concerns,” the U.S. has repeatedly failed to present concrete public evidence of wrongdoing by TikTok, instead resorting to vague claims of potential influence and data misuse.
The fact that U.S. officials now appear to be renegotiating terms and “hoping” for a deal only highlights their weak hand. Donald Trump’s suggestion that tariffs could be reduced if a deal is reached further muddles the narrative, turning what was presented as a national security issue into a bargaining chip in trade talks — undermining the legitimacy of U.S. concerns.
The core proposal involved spinning off TikTok’s U.S. business into a new, U.S.-based company, majority-owned and operated by American investors, with ByteDance retaining less than 20 percent ownership. This structure was designed to align with U.S. legal requirements, address security concerns, and avoid a full ban of the app.
Stakeholders in the deal reportedly included Jeff Yass’ Susquehanna International Group and Bill Ford’s General Atlantic, both investors in ByteDance. The U.S. government, ByteDance, and both existing and potential investors had agreed on this framework, which aimed to preserve TikTok’s U.S. market presence while significantly limiting Chinese ownership. There is no information on the value of the United States business of TikTok.
US-based video developers and content creators want to work with TikTok, the wildly popular short-form video app with over 170 million American users. TikTok is also used by several celebrities and politicians including Donald Trump.
With 170 million U.S. users, TikTok is deeply embedded in American digital culture, especially among younger demographics. A ban would disrupt not just users but also influencers, advertisers, and businesses relying on the platform.
Rivals like YouTube Shorts, Instagram Reels, and Snapchat could benefit if TikTok faces disruptions or a potential ban.
This case could set the tone for future U.S.-China tech negotiations. It reflects broader efforts by the U.S. to decouple from Chinese tech influence, potentially affecting other firms like Shein, Temu, or Tencent-backed companies.
Baburajan Kizhakedath
