In a significant yet cautious development, President Donald Trump has extended the deadline for China’s ByteDance to divest its ownership of TikTok for the fourth time. This extension comes as part of a law passed last year that garnered overwhelming bipartisan support, which mandates a ban on TikTok in the United States if ByteDance fails to comply. The US Supreme Court just upheld this law, increasing the fire under the tech giant.
This phone call signaled the first direct Trump-Xi communications in over three months. During this fireside chat, they explored the current landscape impacting TikTok. While Trump expressed optimism after this call, stating, “It was a very good call … appreciate the TikTok approval,” no concrete announcements regarding the sale of TikTok emerged from the discussions.
For all the signs pointing to a rapprochement, experts warn that any agreement on TikTok is still quite a ways from being done. The deal gets more complex still by Beijing’s reluctance to relinquish control over the wildly successful social media platform. This powerful app has a potential user base of 170 million Americans.
Background on TikTok’s Ownership Controversy
Thus, ownership of TikTok has become a stand-in for many other frustrations in the US-China relationship. Lawmakers were right to pass legislation last year mandating that ByteDance divest from TikTok. This decision was made in direct response to increased national security issues surrounding user data. The legislation did pose incredible support across partisan divide, marking a unique moment of consensus in American politics when it came to China.
Perhaps more importantly, with the Supreme Court’s recent decision in National Federation of Independent Business v. This step is more than good business practices. We know it raises important questions related to our national security and broader global relations.
“On TikTok, Xi said China’s position is clear: the Chinese government respects the will of firms and welcomes companies to conduct business negotiations on the basis of market rules to reach a solution consistent with Chinese laws and regulations while balancing interests,” – Reuters (via Xinhua)
This makes the call between Trump and Xi an important first step towards correcting their already-tattered relationship. It didn’t yield any short-term decisions regarding TikTok’s possible new ownership. Even with this progress experts are still very skeptical about reaching an actual deal. They all agree that whatever deal is struck will require deft steering of clashing American and Chinese priorities.
The Complexity of Potential Deals
Even as negotiations for an agreement between the White House and TikTok go back and forth, experts say ultimately reaching such a deal may be impossible. Rachel Ziemba noted, “Trump is the type of person who often announces frameworks or deals to have deals or a deal that still has a lot of details to be worked out, and this seems to be another example of that.” This third observation highlights the continued lack of clarity in terms of any possible deal.
Robert Rogowsky echoed similar sentiments, stating, “It will be a very complicated transaction, if it happens.” The complications in play come first from regulatory challenges, but more importantly from the strategic objectives of each country. Some observers believe that China’s new hardline approach is a sign of its increasing confidence to face down US pressure.
As negotiations continue, it is still unclear what these ownership structures would look like or how TikTok would be regulated to operate in the U.S. It is unclear how either country will address their competing interests while protecting user data.
“China is taking a much stronger, bolder stand with regard to the US, partly because that’s the China way,” – Robert Rogowsky
Implications for US-China Relations
The current negotiations around TikTok are reflective of larger geopolitical conflicts between the US and China. Other analysts argue that relations are at their lowest point in months. Indeed, they opine that the situation is more tense than it was in the Cold War. The complexity of any potential TikTok deal serves as a reminder to that larger backdrop.
Wei Liang remarked on the recent thaw in relations, stating, “At least they have broken ice after a long while, and it seems like they are ready to negotiate other more difficult issues.” From the spirit of that sentiment goes, there’s a cautious optimism here to what can be the productive dialogue that lays ahead.
Inflaming the debate are worries about China’s competitive edge in global technology markets. As Rogowsky pointed out, “While US is trying to control what sort of chips go to China, they have declined to buy those, probably because they have the technology to design equally good or better and cheaper chips.”
