TikTok’s US Assets Spin-Off Deal on Hold Due to US Tariffs

Background of the Deal

MOSCOW, April 5 (Bernama-Sputnik/RIA Novosti) — Chinese authorities have not approved a deal to spin off TikTok’s US assets due to recently announced US tariffs on Chinese goods, reported Sputnik/RIA Novosti which quoted a Reuters report, citing two sources familiar with the matter.

Deal Details

The report said the deal was largely finalised by April 2, and would have involved spinning off the social media’s US operations into a new US-based company with a majority stake in it held by US investors. ByteDance’s stake in the deal would have been 20 per cent.

Approval and Obstacles

The report said the deal has already been approved by TikTok’s existing and new investors, ByteDance and the US authorities. However, the latest development has put the deal on hold. The reason behind this is the recently announced US tariffs on Chinese goods.

US Tariffs and Its Impact

On Wednesday, US President Donald Trump signed an executive order imposing a 10 per cent base tariff on all imports to the United States starting April 5, while higher, reciprocal tariffs on countries and territories with which the US has the largest trade deficits will take effect on April 9. NBC News reported on Friday, citing a person familiar with the talks, that Trump’s announcement of reciprocal tariffs disrupted a deal for TikTok’s US division that had already been approved by the Chinese government.

Response from ByteDance and the US Government

Later in the day, ByteDance, the Chinese parent company of TikTok, said that it has been in discussions with the US government on a potential way forward to resolve the ongoing issue concerning the video app company operation in the United States. On Friday, US President Donald Trump revealed that he would sign an executive order allowing TikTok to continue operating in the United States for another 75 days as negotiations regarding its acquisition progress.

Consequence and Next Steps

The recent development has put the fate of the deal in jeopardy. The Chinese authorities’ refusal to approve the deal is a direct consequence of the recently announced US tariffs. It is unclear what the future holds for the deal, but it is certain that the US tariffs have disrupted the negotiations.

Conclusion

The recent development has put the deal to spin off TikTok’s US assets on hold. The Chinese authorities have refused to approve the deal due to the recently announced US tariffs. The deal was largely finalised by April 2, and would have involved spinning off the social media’s US operations into a new US-based company with a majority stake in it held by US investors.

FAQs

• What is the reason behind the Chinese authorities’ refusal to approve the deal?
  The reason behind the Chinese authorities’ refusal to approve the deal is the recently announced US tariffs on Chinese goods.
• What will happen to the deal now?
  The fate of the deal is uncertain, but it is clear that the US tariffs have disrupted the negotiations.
• What is the next step for ByteDance and the US government?
  ByteDance and the US government are in discussions to find a potential way forward to resolve the ongoing issue concerning the video app company operation in the United States.
• What is the impact of the US tariffs on TikTok’s operation in the US?
  The US tariffs have disrupted the negotiations and put the fate of the deal in jeopardy.