TikTok ban extended to June, tariff negotiations and algorithms in focus

On April 4, US President Trump said that the deadline for the sale of the US business of the Chinese short video app “TikTok” will be extended by 75 days. This is the second extension of the sale deadline after January, and the new deadline is mid-June. In order to negotiate with the operating company, potential buyers and the Chinese government, the US government decided to extend the deadline again.

The US government is worried about the flow of user data to China and has formulated a TikTok regulatory bill. Force its parent company, China ByteDance, to sell its US business or stop service. Previously, the US Trump administration has been recruiting US buyers and leading the sale negotiations with April 5 as the deadline.

Trump said on his social media: “Further work is needed to obtain all approvals.” He emphasized that he does not want to stop the service. He wrote: “Looking forward to working with TikTok and China to reach a deal.”

ByteDance issued a statement on April 4, saying, “ByteDance is still in talks with the US government and has not reached any agreement. The two sides still have differences on many key issues. According to Chinese law, any agreement must go through relevant review procedures.” It implies that the intention of the Chinese government is the key.
As an American buyer, the plan of an American investor alliance including investment fund Blackstone to contribute 80% of the capital is considered to be very likely. American funds that are existing shareholders of ByteDance will also participate. The framework of the buyer is gradually becoming clear, and the realization of the sale depends on negotiations with the Chinese government.

The focus is on the prospects of tariff negotiations and the core technical algorithms of the APP.

On April 2, Trump announced that a 34% reciprocal tariff would be imposed on imports from China. Together with the 20% tariff that has been implemented, the total tariff rate for Chinese goods has reached 54%.

According to Reuters and other reports, the US government and investors have reached an agreement with ByteDance on the sale of TikTok, and the negotiations are close to success, but they were once shelved due to the announcement of reciprocal tariffs.

This is related to the intention of the Chinese government. ByteDance told the United States on April 3 that the Chinese government would not approve the sale of TikTok before tariff negotiations. China announced retaliatory tariffs against the United States on April 4.

Trump also reiterated on April 4 that he was considering using tariffs as a bargaining chip for the sale of TikTok. He said: “I know that China does not like our reciprocal tariffs. I hope to continue to cooperate sincerely with China.” He mentioned that if the Chinese government approves the sale, tariffs may be reduced.

The algorithm that determines the order in which videos are displayed has also become a focus. TikTok is characterized by arranging videos according to user preferences and interests, and the algorithm is developed and operated in China. The Chinese government regards TikTok’s algorithm as an important technology. The United States expects that China will not allow the United States to acquire the algorithm as a whole and may impose restrictions.

European and American media reported that the company that takes over the US business may continue to use ByteDance’s algorithm under the licensing agreement. This situation can prevent a significant change in user experience. On the other hand, if the technology of Chinese companies continues to be used as the core of the service, it may trigger opposition from the US Congress.

In addition to Blackstone, American venture capital giant Andreessen Horowitz and Oracle of the United States will also participate in the acquisition of TikTok’s US business, and are expected to contribute 50%, and American investment funds such as General Atlantic, which are existing shareholders of ByteDance, will contribute 30%.

In addition, it is reported that Amazon of the United States and mobile advertising distribution company AppLovin of the United States have also expressed acquisition interest to the US government.