A year ago Congress passed a law giving TikTok's Chinese owner a deadline to divest itself from the company or face it being shut down in the US. After a court battle which TikTok lost, that deadline for a sale was set to be Joe Biden's last day in office. But Biden decided to drop the issue in President Trump's lap and Trump announced he would be pausing enforcement few a couple months to allow some US entity to come forward and make a deal. It turns out that deal was getting pretty close as of last week.

Last Wednesday, the Trump administration believed it had a plan to save TikTok.

ByteDance, TikTok’s Chinese owner, along with some of its U.S. investors, and officials in Washington had coalesced around a new ownership structure for the popular video app, four people familiar with the situation said. That structure, the people said, would help TikTok satisfy the terms of a federal law that required the app to find a new owner in order to address national security concerns, or face a ban in the United States.

Under the plan, new investors would own 50 percent of a new American TikTok entity, while Chinese owners would retain less than 20 percent, the limit specified by the law, two of the people said. ByteDance told the White House that Beijing was comfortable with the general structure, two of the people said.

By Thursday morning, a version of a draft executive order from President Trump that outlined the broad strokes of the deal was circulating, according to a copy that was viewed by The New York Times.

And then Trump announced his reciprocal tariffs including a 35% increase on China. ByteDance called the White House and let them know that because of the trade war, the CCP was saying no to any deal. As President Trump said Sunday, "we had a deal, pretty much, for TikTok, not a deal but pretty close, and then China changed the deal because of tariffs."

That meant the possibility of a future deal was in doubt because the President's extension to allow a sale was set to expire over the weekend. On Friday, Trump announced a new extension of another 75 days to give the company more time, but since then things with China have gone from bad to worse. China announced reciprocal tariffs of their own and Trump added another 50% tariff to imports from China on Tuesday. Then China did the same, adding a 50% tariff on their end, and Trump escalated by another 21 percent, bringing the total tariff on Chinese goods to 125% even as he paused the bulk of tariffs on other countries.

At this moment it's hard to see how all of this could possibly be resolved in the next 75 days, including time for more negotiations. TikTok may become the most obvious casualty of the current trade war. Just yesterday, the Chinese government was repeating a hard line on any possible sale.

China said on Wednesday that specific commercial arrangements regarding TikTok must comply with Chinese laws, and this includes technology exports, which must be approved by the Chinese government in accordance with the law.

The comment was made on Wednesday by the Commerce Ministry in response to the United States government's latest move to extend short-video app TikTok's sell-by deadline for another 75 days.

Experts said China's stance indicates that it will not yield to US pressure, including forced administrative intervention in companies' fair and free business operations, and it will not accept the use of such actions as bargaining chips in tariff negotiations or as a means of suppressing Chinese companies.

The fact that potential US buyers aren't really negotiating with Byte Dance but with the CCP underlines the fact that this addictive product isn't really owned by Byte Dance in any traditional sense. They may manage it and own it on paper, but in China the government controls anything and everything it wants to control. This is exactly why bipartisan opposition in congress existed in the first place. If China can say yes or no to any sale it can also demand Byte Dance hand over data on US users. As I've said before, that's not speculation, it's black letter law in China. The government can demand anything it deems necessary from "private" companies and those companies must comply.

Even if the tariff battle hadn't interrupted negotiations, there are still some China hawks who would not have been happy with the deal that was being considered, the one in which China still has 20% ownership.

One reason for the TikTok ban was to stop American users’ data being shared with the Chinese authorities, who hold sweeping data-gathering powers over China-based companies. If ByteDance retains part-ownership, hawks in Congress may believe that the danger remains. Previous efforts to quarantine American TikTok users’ data from ByteDance employees in China have been breached, according to whistleblowers. And if ByteDance keeps control of the recommendation algorithm, it could theoretically still influence Americans’ news diet.

Here's what Sen. Tom Cotton said yesterday about that. In essence, if China has any control or access, that's not good enough.

Let me say bluntly to any American who wants to invest in some half-assed TikTok deal—Congress will never protect you from going into business with Communist China. pic.twitter.com/4ENokuTO4l

— Tom Cotton (@SenTomCotton) April 9, 2025

He has a point. The whole point was to take this app/tool out of China's hands. A 20% stake still potentially gives them 100% access to US data.