Adding further to ByteDance’s trouble, a report today hinted that China’s government might end up opposing the sale of TikTok; it would rather shut down TikTok’s U.S. operations than see it getting sold forcefully to an American company.
The TikTok sale is not the common business transaction we see, instead, it has become a power play. The US government President Donald Trump is demanding ByteDance to make a deal. Given his experience as a “businessman,” the American president has also demanded that his government receive a chunk of its final sale price. However, it unclear if this concept is even legal.
TikTok Deal: A Flashpoint For Authority
Amidst the US and China’s tug-of-war for both economic and political supremacy globally, the TikTok deal has turned into a battleground with a bunch of companies caught in crosshairs. Companies like Microsoft, Twitter, Walmart, Oracle, and others are now stuck in the with ByteDance.
The Trump administration has given a mid-September deadline to seal the deal, but as we see the month passing by, it is not clear if this deadline could be met.
The United States is not the only country to take extreme measures to clamp down on Chinese influence within its borders. Countries like India and Pakistan have banned TikTok, along with hundreds of other popular China-based apps like PUBG Mobile.
The TikTok deal is also under pressure due to the changing regulations in China, where the country’s autocratic leadership could try to limit business transactions of TikTok or kill it completely through its newly updated export control rules.
But the entire situation is a nightmare for ByteDance because it might have to unwillingly submit to either the US or China resulting in loss anyway. On the other hand, for potential buyers like Microsoft, the transaction is more like an obligation that it would have to fulfill even if it is not entirely enthused.
But China Isn’t Backing Down Either
Overall, it’s a power play for the Trump administration. For China, this deal could feel like submission which could undermine its authority and make it appear weaker. So, China is probably not going to take any of it.
However, if the deal actually manages to materialize, it would come more as a surprise than upshot.