TikTok, the Chinese-owned app with approximately 170 million U.S. users, must cease operations in the United States if China does not approve its sale by the extended deadline of September 17.
Speaking on CNBC, Lutnick stressed the necessity of U.S. control over TikTok’s algorithm, stating, “Americans will own the technology, and Americans will control the algorithm.”
This follows a 2024 law mandating ByteDance, TikTok’s parent company, to divest its U.S. assets or face a shutdown by January 19, a deadline President Donald Trump extended three times, most recently by 90 days.
The proposed deal would allow ByteDance to retain a minority stake, with U.S. investors holding majority ownership.
Lutnick warned that without Chinese approval, “TikTok is going to go dark,” reflecting concerns about foreign influence over a platform critical to American communication, amplified by escalating U.S.-China trade tensions.
Trade War Escalation Complicates TikTok Negotiations
The TikTok divestment saga unfolds against the backdrop of a renewed U.S.-China trade war, which has intensified since Trump’s second term began.
Trump’s executive orders imposed a 10% tariff on Chinese goods effective February 4, followed by an additional 34% tariff, bringing the total to 54%, aimed at curbing fentanyl imports and addressing trade imbalances.
China retaliated with a 34% tariff on U.S. goods starting April 10 and restricted exports of critical minerals like rare earths, disrupting U.S. manufacturing supply chains.
A tentative agreement in Geneva reduced U.S. tariffs to 30% and Chinese tariffs to 10% for 90 days starting May 14, but China’s reluctance to approve the TikTok deal stems from these broader trade disputes, including Trump’s tariffs and export controls on AI chips and software.
Attorney General Pam Bondi’s letters to Apple and Google clarified that the Justice Department would not pursue claims against companies hosting TikTok, citing Trump’s national security oversight, though stalled negotiations highlight China’s strategic leverage in the ongoing economic conflict.
Legal and Political Challenges Amid Global Economic Stakes
The TikTok deal faces legal and political hurdles, with some Democratic lawmakers arguing Trump lacks authority to extend the divestment deadline and that ByteDance’s potential minority stake violates the 2024 law’s intent.
They emphasize national security risks tied to Chinese control over user data and content algorithms.
The administration counters that U.S. ownership and algorithm control mitigate these concerns, aligning with efforts to reduce reliance on Chinese technology amid the trade war.
The U.S.-China trade conflict, marked by mutual tariffs peaking at 145% (U.S.) and 125% (China) before the Geneva truce, has strained global supply chains, with industries like semiconductors and automaking hit hard by China’s rare earth export bans.
Trump’s strategy, including ending the de minimis exemption for low-value Chinese shipments, aims to protect American economic interests, but critics warn that prolonged trade disputes could raise consumer prices and disrupt markets.
