Introduction to the TikTok Situation
TikTok was just given another lifeline by the White House, with President Donald Trump delaying the enforcement of the sale or ban law by another 90 days.
White House Statement
"President Trump will sign an additional executive order this week to keep TikTok in operation," said Karoline Leavitt, White House press secretary, in a statement. "As he has already said, President Trump does not want TikTok to be banned. This 90-day extension is what the administration will use to ensure that this deal is closed so that the American people can continue to use TikTok with the assurance that their data is safe and secure."
Background on the TikTok Ban
It has been about five months since a law was passed that would have banned TikTok in the United States if it was not sold by its Chinese parent company. Thanks to President Donald Trump’s promise not to enforce the law, none of these things have happened, apart from a brief 14-hour outage in January. The announcement on Tuesday marks Trump’s third extension of the ban.
Impact on TikTok Users
The announcement means that the app will remain accessible to its 170 million American users, despite legislation passed last year with bipartisan support that raised concerns about TikTok’s Chinese ownership being a national security risk to the United States. This comes as the US and China are vying for leverage in tense trade talks, with TikTok appearing to have become a bargaining chip.
History of the Sale-or-Ban Law
The TikTok sale-or-ban law went into effect on January 19 after it was signed by former President Joe Biden last year. TikTok went offline briefly and sparked outcry from creators, but quickly came back online after Trump signed an order delaying enforcement of the ban by 75 days. It was one of his first acts as president, hoping to achieve a deal to keep the app alive.
Previous Deal Attempts
In April, a deal that would have transferred the majority of TikTok’s US operations into American ownership was almost completed. However, after Trump announced additional tariffs on China, the president was forced to announce another 75-day delay to keep the app in the US.
Chinese Government Involvement
The parent company of TikTok, ByteDance, said after Trump’s tariff announcement stalled progress on the deal in April, "There are important matters that need to be resolved. Every agreement is subject to Chinese law." This break was set to expire on June 19.
Latest Developments
Trump’s latest enforcement delay raises questions about the status of a deal that could secure TikTok’s long-term future in the United States. The Chinese government has given little public indication that it would be willing to approve a sale that goes beyond suggestions that no deal could include the "algorithm" deal, which has been described as the app’s secret sauce.
US-China Relations
The announcement on Tuesday came after the US and China agreed on a framework to ease export controls, a step that could ease tensions and prevent further escalation of export and other restrictions between the two countries. It is not clear whether a TikTok deal is included in the framework, but cooperation between the two sides could pave the way for an agreement to transfer the app to a US buyer.
Trump’s Comments
On Tuesday, Trump told reporters that a TikTok deal would "probably" require approval from the Chinese government and said, "I think we’ll get it." He added, "I think President Xi will ultimately approve it, yes."
Details of the Deal
The deal, which was nearly completed earlier this year, would have seen several American venture capital funds, private equity firms, and tech giants invest in a company that would control TikTok’s US business operations. ByteDance, TikTok’s owner, would have retained a 20% stake in the spin-off company, a key provision of the law.
Other Bidders
Several other high-profile bidders had also put in offers to acquire the platform, including a group led by billionaire Frank McCourt and "Shark Tank" star Kevin O’Leary, as well as Amazon and AI company Cloudflare.
Trump’s Change of Heart
It was Trump who first tried to ban TikTok during his previous administration, but he said he had changed his mind after "using it." TikTok CEO Shou Chew attended Trump’s inauguration and sat alongside cabinet secretaries and other tech CEOs.
