Trump on Friday extended by 75 days a deadline for ByteDance to sell US assets of the popular short video app to a non-Chinese buyer, or face a ban that was supposed to have taken effect in January under a 2024 law.
The deal, the structure of which was largely finalised by Wednesday, according to one of the sources, would have spun off TikTok's US operations into a new company based in the US and majority-owned and operated by US investors. ByteDance would hold a position of less than 20 per cent.
The deal had been approved by existing investors, new investors, ByteDance and the US government, the source said.
The White House and the Chinese Embassy in Washington did not immediately respond to requests for comment. TikTok declined comment.
The Associated Press was first to report China's disapproval.
"The deal requires more work to ensure all necessary approvals are signed," Trump said on social media, explaining why he was extending the deadline he set in January that was supposed to have expired on Saturday.
"We hope to continue working in good faith with China, who I understand is not very happy about our reciprocal tariffs."
China now faces a 54 per cent tariff on goods imported into the United States after Trump announced he was hiking them by 34 per cent this week, prompting China to retaliate on Friday.
Trump has said he would be willing to reduce tariffs on China to get a deal done with ByteDance to sell the app used by 170 million Americans.
Trump has said his administration was in touch with four different groups about a prospective TikTok deal. He has not identified them.
A major stumbling block to any deal for TikTok's US business is Chinese government approval. China has not made a public commitment to allow a sale and Trump's comments suggested renewed Chinese opposition.
"We look forward to working with TikTok and China to close the deal," Trump wrote on Friday.
"We do not want TikTok to 'go dark,'" he added.
Congress passed the measure last year with overwhelming bipartisan support, as politicians cited the risk of the Chinese government exploiting TikTok to spy on Americans and carry out covert influence operations. Democratic then-President Joe Biden signed it into law.
Some politicians have said Trump must enforce the law, which had required TikTok to stop operating by January 19 unless ByteDance had completed a divestiture of the app's US assets. Trump began his second term as president on January 20 and opted not to enforce it.
The Justice Department in January told Apple and Google that it would not enforce the law, which led them to restore the app for new downloads.
The new Trump order will set a mid-June deadline for a deal.
The White House-led talks on the future of TikTok are coalescing around a plan for the biggest non-Chinese investors in parent company ByteDance to increase their stakes and acquire the app's US operations, Reuters has reported.
The plan entails spinning off a US entity for TikTok and diluting Chinese ownership in the new business to below the 20 per cent threshold required by US law, rescuing the app from a looming US ban, sources told Reuters.
Jeff Yass' Susquehanna International Group and Bill Ford's General Atlantic, both of which are represented on ByteDance's board, are leading discussions with the White House, Reuters has reported.
Walmart denied an ABC News report that it was also considering joining a group of investors in a deal for TikTok.
with AP
