Formally, the deferment on the ban on the TikTok social network in the US is valid until next Saturday, and potential participants in the deal to separate American assets still have time to negotiate. Donald Trump did not hide the fact that he is ready to use customs tariffs as an argument for bargaining with the Chinese side.
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The extent of Chinese involvement, or even parent company ByteDance, in the negotiations to spin off TikTok’s US business has not yet been disclosed, but US President Donald Trump said on board a government jet yesterday that the tariff issue could theoretically be used as leverage over China. “There’s a situation with TikTok where China will probably agree to approve the deal in exchange for doing something about tariffs. They give us more negotiating power. That’s always the case,” Trump said.
He also added that the US authorities are “very close to making a deal with a group of very good people,” refraining from listing the possible participants in the deal. According to Bloomberg, the structure of the deal currently being discussed involves a consortium of American investors, including Andreessen Horowitz, Blackstone and Oracle, with the latter limited to a modest stake in the new joint venture and the function of ensuring the security of the personal data of American TikTok users. The group of new investors could get a 50% stake in TikTok’s American business, existing ByteDance investors would retain 30% of the shares, and the Chinese company itself would receive less than 20% of the shares, which, from the point of view of American law, would be enough to ensure its “neutrality” in terms of influencing the social network’s activities in the United States.
One of the ideas being discussed at the negotiating stage is for China’s ByteDance to retain nominal control over TikTok’s recommendation algorithm, but then license it and transfer it to an American structure that will be created with the participation of American investors. A difficult situation is already emerging around this algorithm. On the one hand, Beijing considers such technologies important for national security and well-being, and therefore is not ready to transfer them outside of China without special approval from the government. On the other hand, the law adopted in the United States last year does not leave the Chinese authorities or ByteDance itself the opportunity to manage this algorithm in US jurisdiction.