TikTok Bracing for a U.S. Shutdown as Trump Refuses to Budge

TikTok US operations
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TikTok US operations
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Photo Credit: Morning Brew

The Trump administration will not extend its deadline for ByteDance to sell its TikTok US operations. That could mean lights-out in a matter of days if a deal isn’t signed.

TikTok is now staring at a US ban if it doesn’t immediately reach an agreement with a US buyer. The shutdown could be days away, with Trump refusing to relent while reiterating a September 15th deadline.

“We’ll see what happens. It’ll either be closed up, or they’ll sell it,” Trump told reporters before boarding Air Force One. Some analysts expected the US government to extend the short-notice deadline – but Trump refuses to budge.

Trump issued a pair of executive orders last month, saying ByteDance could be a threat to the United States’ national security. At the time, ByteDane was in negotiations with Microsoft to buy a small stake in TikTok. After Trump learned of the deal, he escalated talks into a full-blown acquisition of TikTok US operations.

Separating TikTok and ByteDance is trickier than it seems on the surface. China has updated laws governing which artificial intelligence technologies can be exported. The law would impact the sale of TikTok US operations to another company like Microsoft. TikTok’s AI algorithms for viral content is why the social media company has managed to grow so quickly.

ByteDance says it will strictly follow Beijing’s rules, which might exclude TikTok’s personalization algorithm. That may make a potential sale less attractive to potential buyers. Some US companies reportedly in the ring include Microsoft, Walmart, Twitter, and Oracle.

On Friday, Reuters reported that the Chinese government expressed privately that it would rather shutter TikTok than sell it off. ByteDance reportedly has until September 20th to reach a deal under the Trump administration’s terms. But Trump continues to insist on a September 15th deadline when discussing the issue with media.

TikTok also faces a November deadline to divest its US assets in an order based on a recommendation from the Committee on Foreign Investment in the United States.

Senator Marco Rubio (R-FL) kicked off those investigations last year after writing to the CFIUS seeking to launch an investigation into censorship and national security concerns. Shortly after Rubio’s letter, CFIUS launched an investigation into TikTok’s acquisition of Musical.ly.

As the investigation continued, several US military branches banned TikTok from government devices. The Navy, Army, and Marines all took that action at the end of last year. The US House of Representatives and Senate voted to ban TikTok on government devices this summer.

Now, ByteDance only has a few days to reach a deal or face a total TikTok shutdown. There are billions of dollars on the line here, as many companies are pivoting to TikTok for marketing and promotion.