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Last Wednesday, the Trump administration believed it had a plan to save TikTok. ByteDance, TikTok’s Chinese owner, along with some of its US investors, and officials in Washington had coalesced around a new ownership structure for the popular video app, four people familiar with the situation said. That structure, the people said, would help TikTok satisfy the terms of a federal law that required the app to find a new owner in order to address national security concerns, or face a ban in the United States.
Under the plan, new investors would own 50 percent of a new American TikTok entity, while Chinese owners would retain less than 20 percent, the limit specified by the law, two of the people said. ByteDance told the White House that Beijing was comfortable with the general structure, two of the people said.
By Thursday morning, a version of a draft executive order from President Trump that outlined the broad strokes of the deal was circulating, according to a copy that was viewed by The New York Times.
Then the plan hit a wall. ByteDance called the White House with the news: Now that Mr. Trump had announced a slew of tariffs on Chinese imports, the Chinese government would not let the TikTok deal proceed, two of the people said.
In response, Mr. Trump bought the app more time. On Friday, he paused enforcement of the federal law, extending the deadline for a TikTok deal into mid-June.
The standstill highlights how the video app is mired in a geopolitical tussle between the United States and China over trade and tech supremacy. It also illuminates China’s power over TikTok’s future in the United States, raising questions about whether a deal for TikTok will ever get done.
The administration and ByteDance had been hammering out a structure that would allow TikTok’s biggest US investors, including the firms General Atlantic and Susquehanna International Group, to hold on to their investments while government officials brought in new funds to dilute the app’s Chinese ownership.
The proposal was laid out in a lengthy and detailed document for investors, three people with knowledge of the matter said. Two people involved in the deal said there was more work to do…
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