Tariffs and TikTok: Inside Trump’s High-Stakes Tech Standoff with China

Since the beginning of this year, President Donald Trump has emphasized that "enhancing America's global AI dominance" is a top priority. His effort to transfer ownership of TikTok’s U.S. operations away from Chinese parent company ByteDance, a major player in China’s AI sector, has become an early test of that goal. The situation is unfolding amid a rapidly intensifying trade dispute between the United States and China. As of April 10, 2025, the U.S. has raised tariffs on Chinese imports to 145%, prompting China to respond with tariffs of 84% on American goods. These escalating measures reflect the complex intersection of national security, technological influence, and global economic policy.

Ongoing Negotiations and Shifting Timelines

Trump has taken decisive steps by appointing Vice President JD Vance and National Security Advisor Mike Waltz to spearhead the negotiations. In a high-level meeting held in the Oval Office on April 3, 2025, along with Commerce Secretary Howard Lutnick and Director of National Intelligence Tulsi Gabbard, the administration presented several options to secure an American-led future for TikTok.

As part of the broader initiative to transfer the popular video-sharing app from ByteDance to American investors, U.S. venture capital firm Andreessen Horowitz began negotiating an investment. This effort, driven by a consortium led by Oracle and supported by key U.S.-based stakeholders, originally aimed to meet a federal deadline of April 5, 2025. 

That deadline required ByteDance to divest TikTok’s U.S. operations to non-Chinese entities, or else risk a nationwide ban that would disconnect the app’s 170 million U.S. users.

However, in a significant policy twist, President Trump extends the deadline for ByteDance’s divestiture by an additional 75 days, pushing it to mid-June 2025. 

“The Deal requires more work to ensure all necessary approvals are signed, which is why I am signing an Executive Order to keep TikTok up and running for an additional 75 days,”

he announced in a post on Truth Social on April 4, 2025. This move marks the second extension granted by Trump since taking office—a clear signal of his administration’s commitment to both national security and the app’s operational continuity.

In the same post on Truth Social, Trump elaborated on the decision, highlighting progress on the deal, the role of tariffs, and his intention to avoid TikTok going “dark.”

A Near-Deal and a Dramatic Collapse

In parallel with these extensions, reports on April 2, 2025, indicate that a deal had come close to finalization. The proposed plan would see a newly created American TikTok entity owned by a consortium of U.S. investors, including Oracle, Blackstone, and Andreessen Horowitz. Under this plan:

• New investors would own 50% of the U.S. entity.
• Current investors would hold 30%.
• ByteDance would retain a minority stake below the 20% threshold mandated by U.S. law.

This carefully structured arrangement was designed to address national security concerns by ensuring that U.S. data remains under domestic control—while still allowing ByteDance to retain some influence over its prized algorithm.

However, the deal collapsed on April 3, 2025, when Trump imposed new tariffs on Chinese goods. The additional tariffs boost the total rate to 145%, a move that triggers a swift response from ByteDance. Representatives from ByteDance inform the White House that the Chinese government will not approve the TikTok deal until tariff negotiations progress. Trump underscores the connection between tariffs and deal approval by stating, 

“We had a deal pretty much for TikTok – not a deal but pretty close – and then China changed the deal because of tariffs. If I gave a little cut in tariffs they would have approved that deal in 15 minutes, which shows the power of tariffs.”

Adding to the complexity, China retaliates by imposing 84% tariffs on all U.S. imports. This escalation ties the future of TikTok to the broader, high-stakes U.S.-China trade negotiations—a point that underscores the interconnection of technology policy and international economic strategy.

The Broader Investment Landscape - maybe shorten

The U.S. consortium aiming to secure TikTok’s future has attracted interest from major players, including Oracle, Blackstone, and Andreessen Horowitz, as well as Amazon, Frank McCourt, Kevin O’Leary, Alexis Ohanian, and YouTuber MrBeast. Andreessen Horowitz, known for backing Elon Musk’s 2022 Twitter deal, is seen as a key financial contender. While Blackstone is reportedly considering an investment under $1 billion, talks remain fluid.

Trump Administration’s Strategic Vision

Throughout these developments, President Trump remains optimistic about finalizing a TikTok deal, even as he displays tactical flexibility. Early on, he signaled his desire to see TikTok continue operating, remarking, “I’d like to see TikTok remain alive.” With senior officials scheduled to review final proposals and potentially adjust tariffs to facilitate a deal, the administration clearly views the TikTok negotiations as central to maintaining both national security and America’s competitive edge in AI and tech innovation.

Larry Ellison, the co-founder and chairman of Oracle, continues to play a crucial role as Oracle—TikTok’s long-time cloud service provider—looks to secure U.S. user data while enabling ByteDance to preserve part of its proprietary technology. By orchestrating the collaboration between prominent U.S. investors, the White House is effectively steering an intricate alignment between technological leadership and national policy.

As negotiations continue, the fate of TikTok now hinges not only on domestic regulatory decisions but also on the outcome of broader U.S.-China trade talks. This situation highlights the challenges of balancing national security, international trade policy, and technological innovation.