Photo Credit: Nik
Trump’s broad-ranging tariffs may have ultimately delayed a TikTok deal, leading to the latest 75-day extension to make room for more negotiations.
The Trump administration sounded confident that it was nearing a deal for TikTok’s operations to be spun off in the US into another company owned by a majority of American investors. But that deal seems to have been shuttered by Beijing at the eleventh hour in the face of Trump’s wide-ranging tariffs, including against China.
According to those close to the matter, representatives for TikTok’s China-based parent ByteDance called off the deal, telling White House officials it was a no-go until they could negotiate about trade and tariffs.
The near-deal, led by Vice President JD Vance’s team, called for a 120-day closing period to finalize the financing and paperwork. It involved a group of investors that includes Oracle, Blackstone, Andreessenn Horowitz, and several others. Notably, ByteDance would still have maintained a minority ownership stake in the new company, under the 20% threshold required by Congress.
Allegedly, the deal had the approval of existing investors, new investors, ByteDance, and the administration. But those negotiations were placed on hold by the Chinese government once Trump’s tariffs went into effect.
Now, a group of TikTok investors is suing ByteDance, claiming the company sabotaged the proposed acquisition in order to maintain control over TikTok’s US operations. This, they say, is in violation of antitrust laws.
A Florida-based company called TikTok Global, formed by American investors specifically to acquire the social platform’s operations during the first Trump administration, filed the lawsuit in the Southern District of Florida. The company alleges it submitted a $33.3 billion acquisition agreement to ByteDance on September 14, 2020, which purportedly met all requirements set by the Committee on Foreign Investment in the United States.
“Plaintiff would soon discover the game was rigged from the start, because ByteDance had other plans, plans that circumvented proper procedures, stifled competition, and maintained ByteDance’s control over TikTok’s US operations — all under the guise of compliance with the executive order,” reads the lawsuit.
TikTok Global claims ByteDance ignored its allegedly compliant offer, instead pursuing a partnership with Oracle which did not fully address national security concerns. Investors say the situation escalated when then-Treasury Secretary Steven Mnuchin announced that Oracle had been selected as TikTok’s “trusted technology partner” in the US.
The lawsuit seeks at least $58 billion in damages from ByteDance, TikTok Inc., and ByteDance founder Yiming Zhang. TikTok Global is also requesting preliminary and permanent injunctive relief requiring ByteDance to divest TikTok’s US operations to them, asserting they are “unequivocally entitled to recover those losses.”
The filing comes as the deal for TikTok remains in limbo, the result of the emerging trade war between China and the United States. Trump has said he would consider lessening tariffs on China if the government would negotiate on the TikTok deal. The outcome remains to be seen.
On Friday, Trump extended the deadline for TikTok by another 75 days, pushing the previous April 5 deadline out. It’s the second time he has pushed the deadline since taking office in January.
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