President Trump’s new tariffs on China have thrown a wrench in efforts to negotiate a deal over TikTok’s divestment from its parent company ByteDance, as Washington and Beijing sink deeper into a trade war.
After the White House finalized a deal on TikTok last week, Trump’s tariffs upended negotiations, prompting China to decline to approve the deal without further discussions on tariffs.
Trump deepened his trade war with China on Wednesday, hiking tariffs on Chinese goods to a staggering 125 percent while easing them on nearly all other countries. As Trump goes to battle with China, he may be handing Beijing greater bargaining power, experts said.
“This national security imperative to divest from ByteDance is now giving China leverage at the same time that Trump is trying to put the screws to them with tariffs,” said Sarah Kreps, director of Cornell University’s Tech Policy Institute.
The president signed an executive order Friday, once again delaying enforcement of a law that required ByteDance to divest from TikTok or face a ban on U.S. app stores and networks.
After taking office, Trump gave TikTok an initial 75-day reprieve from the ban, which was set to expire Saturday. His latest executive order gives the app another 75 days to reach a deal and avert a ban.
In his announcement Friday, Trump touted the “tremendous progress” his administration had made on a deal but said it “requires more work to ensure all necessary approvals are signed.”
However, a source familiar with the negotiations told The Hill that a deal had been approved by existing investors, new investors, ByteDance and the U.S. government last Wednesday.
The deal would have seen TikTok’s U.S. operations spun off into a new company owned and operated by a majority of American investors, while ByteDance would maintain a minority stake in the company.
After Trump announced his new slate of “reciprocal” tariffs, including a 34 percent tariff on Chinese goods, ByteDance said China would no longer approve the deal, according to the source.
"When ByteDance then withdraws from consideration of this deal, it's not surprising,” Kreps said, adding, “They now have the bargaining leverage, because this TikTok deal cannot go forward unless they agree to it.”
On top of earlier import taxes imposed by the Trump administration, China was set to face more than 50 percent in tariffs. Beijing responded by announcing a 34 percent tariff on all U.S. goods.
Trump, in turn, levied another 50 percent tariff on Chinese goods, and a total 104 percent import tax went into effect early Wednesday. Beijing upped its own tariffs to 84 percent, prompting the president to announce plans to raise his tariffs to 125 percent.
“Trump has gone so overboard with the tariffs and has gotten into such a mano a mano battle with President Xi [Jinping] that it's hard for me to see that there'll be some happy resolution from Trump’s standpoint on TikTok,” said Gary Clyde Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics.
The president acknowledged the impact of his tariffs on the TikTok deal Sunday, telling reporters aboard Air Force One that the administration was “pretty close” to a deal but “then China changed the deal because of tariffs.”
“If I gave a little cut in tariffs, they'd approve that deal in 15 minutes, which shows you the power of tariffs, right?” he said.
He had previously floated the idea of tying a TikTok deal to tariffs, suggesting in late March that he could give China “a little reduction in tariffs or something to get it done.”
However, Hufbauer argued that Xi has a stronger bargaining position than Trump because the U.S. is more vulnerable to recent trade actions than China. While Beijing can potentially redirect its “fairly modest” amount of exports to the U.S., he suggested Americans will be hit hard by inflation and stock market fluctuations.
“The balance of political pain will be much heavier in the U.S. than in China,” he said. “That's going to become evident, I think, in the weeks ahead.”
Trump backed down slightly from his “reciprocal” tariffs on other countries Wednesday, announcing a 90-day pause at the same time he revealed that he was further increasing tariffs on China.
“Maybe the way they will deal with TikTok is just to postpone any decision,” Hufbauer added. “Already Trump has postponed the law, and I guess he could do it again. ... So, maybe it goes on ice as opposed to a clear denial.”
Critics have raised questions about the legality of the president’s latest extension. Sen. Mark Warner (D-Va.), who led the push to pass the divest-or-ban bill last year, voiced “deep reservations” about the TikTok negotiations in a letter to Trump on Monday.
He argued that Trump’s second 75-day delay is a “clear violation of the law,” which permitted the president to give TikTok a single 90-day extension.
Warner also questioned the legality of the deal under consideration, suggesting it may not meet the “clear statutory thresholds for eliminating ByteDance’s influence over TikTok’s U.S. operations.”
The potential tie between tariffs and a TikTok deal are “perhaps most concerning,” he added, noting that Trump has “explicitly suggested that your compliance with the statutorily mandated divestiture could be tied to negotiations over tariffs.”
Sen. Chris Murphy (D-Conn.) similarly slammed the recent extension as “100 percent illegal.”
“Trump seems to be biding time to work out a deal where one of his political allies takes over TikTok and turns it into a MAGA propaganda machine,” Murphy wrote in a Saturday post on the social platform X. “Rumors are that China will stay in partial control.”
Rep. John Moolenaar (R-Mich.), who chairs the House Select Committee on the Chinese Communist Party, argued against any deal that would leave ByteDance with influence over the platform.
“A deal that keeps ByteDance in control wouldn’t just miss the mark on addressing national security concerns — it would directly violate the law,” Moolenaar wrote in an op-ed for the National Review last month.
“There’s still time for a ‘deal of the century’ — but only one that fully adheres to the law,” he added. “ByteDance must divest, plain and simple. If that doesn’t happen, TikTok’s days in America are numbered.”
The collision of Trump’s tariff and TikTok policies hit on underlying issues at play with the popular social media app, said Jennifer Huddleston, a senior fellow in technology policy at the libertarian-leaning Cato Institute.
“This represents in some ways the debate over a TikTok divest-or-ban [law] has been about TikTok, but in many other ways, it's actually been a bigger issue,” she said. “That includes both a bigger issue about the overall U.S.-China relationship, as well as a bigger debate over technology companies and particularly social media.”
The law forcing the TikTok divestment was spurred by data privacy and national security concerns tied to its China-based parent company. Lawmakers on both sides of the aisle expressed concerns that Beijing could access and potentially manipulate American users’ data.
While TikTok is the only app explicitly named in the law, it could apply to other apps owned or operated by foreign adversaries, such as newly released artificial intelligence (AI) models from Chinese startup DeepSeek.
“Whatever happens to TikTok at the end of this 75 days or at the end of the next 75 days, this is actually both a much bigger law, as well as a much bigger conversation to have,” Huddleston added.
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