Report from Bloomberg
In Brief – President Donald Trump said he would give social media video platform TikTok another extension of a deadline to sell to a US owner. Trump has said many times that he likes the platform because it helped his 2024 presidential campaign appeal to younger voters. The federal law that requires TikTok’s US operations be sold by China-based ByteDance to address national security concerns was enacted with overwhelming bipartisan support in April 2024. However, US-China relations have become increasingly tense, with the Trump Administration imposing new tariffs on products from China that can reach 145%, while the Chinese Government has responded with a range of trade retaliations, including tariffs of up to 125% on some US products. Trump has said that a deal to sell TikTok to US buyers was very close before the new tariffs were imposed and that he would consider reducing the levies on China somewhat to facilitate a TikTok sale.
Context – There is no legal clarity surrounding the unprecedented TikTok matter. Instead, the most relevant fact appears to be that President Trump went from the first President proposing to ban the app to its chief US backer. The federal law forcing the sale of the platform survived a review by the Supreme Court, which rejected the First Amendment-based challenges of the company and a group of content creators. The law’s deadline for a sale was January 19, but it gave the President the authority to extend for 90 days the provisions that prohibit app stores and hosting providers from supporting TikTok’s US services if he certified that the time was needed to wrap up a qualified deal to divest the company. Trump did so on January 20. Conservative Republican “China Hawks” condemned the initial extension order, which they said exceeded the law’s provisions. He granted a second extension on April 4 with more criticism coming from Democratic backers of the law. Questions remain regarding how the app could operate without the current TikTok algorithm engineered by ByteDance, as well as the implications of the worsening US-China trade relationship on the prospects of a transaction.