As deadline nears, what’s the state-of-play on TikTok US sale?

Trump has repeatedly said the deadline for sale is September 15, but his first executive order stipulated Sept 20.

Trump TikTok
TikTok has become a flashpoint among rising US-China tensions as the US presidential election draws near [File: Hollie Adams/Bloomberg]

United States President Donald Trump said on Thursday he does not plan to extend the deadline for ByteDance to sell TikTok’s US business, with the process still mired in uncertainty.

Trump has repeatedly said the deadline for the sale of the wildly popular short video app is September 15, although that was not the date stipulated in either of the two executive orders his administration issued in August.

The first order, banning US companies from transacting with the Chinese company or its subsidiaries, stipulated a September 20 deadline. The second, with a deadline of November 12 – after the US presidential election – demands that ByteDance sell TikTok due to national security concerns.

Microsoft Corp and Oracle Corp are among the suitors for TikTok’s US assets. Operations in Canada, New Zealand and Australia are also part of the deal.

The White House did not immediately respond to a request for comment by the Reuters news agency.

What’s the deadline?

Trump first told reporters on July 31 that he planned to ban TikTok in the US within 24 hours.

But on August 3, after Microsoft revealed it was in talks to buy parts of TikTok, he said he would give ByteDance 45 days to sell to a US buyer. Then, on August 6, Trump issued the executive order banning transactions with ByteDance and its affiliates in 45 days, effectively a September 20 deadline.

Who needs to sign off on this deal? 

ByteDance and the potential TikTok buyers have to come up with a deal acceptable to the US Committee on Foreign Investment in the US (CFIUS), an interagency group.

The Trump administration does not want ByteDance to have any continued interest in TikTok, and for a tech company to be the lead investor in the short video app.

China’s commerce ministry joined the party on August 28 with a revised tech export control list that experts said would give it regulatory oversight over any TikTok deal.

This means Beijing’s sign-off is likely to be needed too, something many observers doubt will happen immediately. The rules say that it can take up to 30 days to obtain preliminary approval to export the technology.

Last week, when asked about how the rules could impact the TikTok deal, the Chinese commerce ministry said the regulatory changes are not targeted at specific companies, but reaffirmed their right to enforce the rules.

What if there’s no deal by September 20?

If the deadline is not extended, then transactions with TikTok would be banned, although exactly which ones have not been specified.

Reuters news agency has reported the executive order could make advertising on the platform illegal and TikTok has been preparing advertisers for such an outcome. The US is also likely to ban TikTok from being downloaded from app stores.

However, it is unclear whether there are transactions that can be prohibited that will prevent existing users who have already downloaded TikTok from using it.

When confronted with a ban in India, TikTok chose to shut down voluntarily.

What other options does TikTok have? 

TikTok and ByteDance filed a lawsuit in Los Angeles federal court on August 24 against Trump’s executive order, calling it a pretext to fuel anti-China rhetoric.

Could the deadline for a sale move again? 

On August 14, the Trump administration issued another executive order that required ByteDance to divest its interest in video-sharing app TikTok’s operations in the US within 90 days. This suggests a deadline of November 12.

The second order did not say what might happen if ByteDance failed to comply.  

Source: Reuters