Former President Donald Trump, who once promised to save TikTok from being banned by the United States government, has now threatened to shut down the app if a proposed sale to US-based buyers is not finalized. Commerce Secretary Howard Lutnick confirmed that the administration is prepared to block TikTok’s operations in the United States if China does not approve the deal. The proposed agreement seeks to ensure that US entities have control over the app’s algorithm and technology, but China has not agreed to the terms, leading to the potential for a shutdown of the platform.
Under the deal Trump is now pushing, ‘China can have a little piece or ByteDance, the current owner, can keep a little piece,’ Lutnick said. ‘But basically, Americans will have control. Americans will own the technology, and Americans will control the algorithm.’ However, ByteDance’s board has long maintained that the US can alleviate its national security fears – that China may be using the popular app to manipulate and spy on Americans – without forcing a sale. In January, a ByteDance board member, Bill Ford, told World Economic Forum attendees that a non-sale option ‘could involve a change of control locally to ensure’ TikTok ‘complies with US legislation’ without selling off the app or its algorithm.
At this point, Lutnick suggested that the US is unwilling to bend on the requirement that the US control the recommendation algorithm, which is viewed as the secret sauce that makes the app so popular globally. ByteDance may be unwilling to sell the algorithm partly because then it would be sharing its core intellectual property with competitors in the US. Earlier this month, Trump had claimed that he wasn’t ‘confident’ that China would approve the deal, even though he thought it was ‘good for China.’ Analysts have suggested that China views TikTok as a bargaining chip in its tariff negotiations with Trump, which continue to not go smoothly, and it may be OK with the deal but unwilling to release the bargaining chip without receiving key concessions from the US. For now, the US and China are enjoying a 90-day truce that could end in August, about a month before the deadline Trump set to sell TikTok in mid-September.