China prevents advancement to sell Tiktok in the US after announcement of new tariffs

The negotiation that provided the separation of US Tiktok operations was suspended after signaling by the Chinese government that it would not approve the terms of the agreement.

The decision occurred amid the escalation of commercial tensions between the United States and China, motivated by the announcement of additional tariffs by the US government.

According to two sources with direct knowledge of the subject, the plan provided for the creation of a new company based in the United States, which would assume Tiktok’s assets in the country.

The new entity would be mostly controlled by US investors, while Bytedance, a Chinese company that currently holds Tiktok, would maintain a minority participation of less than 20%.

The negotiations had advanced until the final stage. According to one of the sources, the structure of the agreement was defined on Wednesday and received approval from current investors, new investors, Bytedance and the US government. However, the negative signaling of the Chinese government interrupted the process before formal conclusion.

Bytedance and the White House were sought but did not respond to requests for comment. The China embassy in Washington did not comment until the time of publication.

On Friday, US President Donald Trump announced an extension for 75 days of the deadline for Bytedance to sell Tiktok’s assets in the US to a non-Chinese buyer. The measure advances the entry into force of the ban on the application, which was scheduled for January based on the legislation approved in 2024.

“The agreement requires more work to ensure that all necessary approvals are signed,” Trump said in a publication on social networks, justifying the extent of the deadline. “We hope to continue working in good faith with China, which I understand that you are not very happy with our reciprocal tariffs.”

The commercial impasse between the two countries intensified this week. On Tuesday, the United States announced an increase in import rates on Chinese goods, raising the rate to 54%. In response, China has reported the imposition of equivalent tariffs on US products.

The proposal to break up Tiktok’s operations in the United States emerged as an alternative to the total ban on the application in US territory.

The US government claims that Bytedance’s presence in application control represents risks to national security, due to the potential data sharing with the Chinese government. China denies any interference with company operations.

Tiktok is used by about 170 million people in the United States, according to US government data. The relevance of the application in the digital environment, especially among the young public, led to discussions about their political, social and commercial impacts.

The possibility of veto generated reactions of users, parliamentarians and civil rights defense groups, which point out possible violations of freedom of expression.

Despite advanced negotiations, the direct involvement of the Chinese government has become a determining factor in suspension of the agreement. Sources close to the negotiation indicate that the Chinese government veto is related to the current trade conjuncture and the dispute for reciprocity measures in the tariffs imposed by Washington.

Donald Trump stated that he would be willing to review the tariffs imposed on China if an agreement on Tiktok is realized. “If we can complete the sale properly, with security guarantees for Americans data, we can consider adjustments to tariffs,” said the president in another statement published on Friday.

The negotiations between Bytedance and US investors began after executive orders signed by Trump in 2023, determining the output of Chinese control over applications considered sensitive from the point of view of national security.

Since then, the Chinese company has sought alternatives that meet the regulatory requirements of the United States without compromising their commercial interests.

With the suspension of negotiations, Tiktok’s future in the United States remains undefined. The extent of the deadline for sale offers a margin for the resumption of conversations, but the resistance of the Chinese government and the ongoing commercial tension create obstacles to the realization of the agreement.

The new round of tariffs announced this week and Beijing’s immediate response indicate that the political environment will continue to directly influence corporate decisions involving technology companies. Tiktok, in this context, has become one of the main points of tension among the two largest economies in the world.