The potential reduction of China tariffs as part of a deal to facilitate the sale of TikTok’s U.S. operations is a complex and evolving situation. Here’s a breakdown of key points:
Background:
- TikTok’s Ownership & U.S. Concerns:
- TikTok is owned by ByteDance, a Chinese company.
- The U.S. government has raised national security concerns over data privacy and potential influence by the Chinese government.
- The Trump administration previously sought to ban TikTok unless it was sold to a U.S. company (e.g., Microsoft, Oracle, Walmart).
- The Biden administration has continued scrutiny under CFIUS (Committee on Foreign Investment in the U.S.).
- China’s Position:
- China has opposed a forced sale, updating export control rules in 2020 to include AI algorithms (which TikTok relies on), making a sale difficult.
- Any deal would likely require approval from Chinese regulators.
Possible Tariff Cuts as Leverage:
- The U.S. could offer tariff reductions on Chinese goods as an incentive for China to allow the TikTok sale.
- This could be part of broader U.S.-China trade negotiations, where both sides seek compromises.
- The Biden administration has been reviewing Trump-era tariffs on Chinese imports (under Section 301), with some industries pushing for reductions.
Challenges & Considerations:
- National Security vs. Trade Policy: Linking TikTok’s fate to tariffs could be controversial, as they are separate issues.
- Chinese Approval: Even if the U.S. eases tariffs, China may still resist allowing TikTok’s algorithm to be sold.
- Political Reactions: Hardliners in both countries may oppose concessions.
Potential Outcomes:
- A partial deal where TikTok’s U.S. operations are restructured (e.g., partnership with a U.S. tech firm like Oracle) rather than a full sale.
- A broader U.S.-China trade agreement where TikTok and tariffs are part of negotiations.
- Continued stalemate, with TikTok facing U.S. restrictions (e.g., app store bans) unless a resolution is reached.
Bottom Line:
While cutting China tariffs could help facilitate a TikTok deal, significant hurdles remain due to geopolitical tensions, regulatory barriers, and technology transfer concerns. Any movement would likely require high-level diplomatic and economic negotiations between the U.S. and China.
US President Donald Trump says he may cut tariffs on China to help seal a deal for short video app TikTok to be sold by its owner ByteDance.
Trump also said he was willing to extend a 5 April deadline for a non-Chinese buyer of the platform to be found.
In January, he delayed the implementation of a law passed under the Biden administration to ban TikTok.
The legislation, which was signed into law in 2024, cited national security grounds for the sell or be banned order.
“With respect to TikTok, and China is going to have to play a role in that, possibly in the form of an approval, maybe, and I think they’ll do that,” Trump told reporters on Wednesday.
“Maybe I’ll give them a little reduction in tariffs or something to get it done,” he added.
Trump also said he expected at least the outline of a deal to be reached by the 5 April deadline.
In response to the comments, a spokesman for China’s foreign ministry said Beijing “has repeatedly stated its position. China’s opposition to the imposition of additional tariffs has always been consistent and clear”.
Trump made the comments after announcing new import taxes of 25% on all cars and car parts coming into the US in a move that threatens to widen the global trade war.
The BBC has contacted TikTok for comment.
The biggest sticking point to finalising a deal to sell the TikTok business, which is worth tens of billions of dollars, has always been securing Beijing’s agreement.
Trump has previously tried to use tariffs as leverage in the negotiations.
On his first day back in the White House, on 20 January, the president threatened more import duties on China if it did not approve a TikTok deal.
The hugely popular app is used by around 170 million Americans.
Trump, who called for TikTok to be banned in his first term as president, now has an account on the platform.
He has more than 15 million followers and has said he received billions of views on the app during his presidential election campaign.
Separately, the US increased levies on all imports from China to 20% this month.
That doubled the tariffs Trump imposed on the world’s second largest economy on 4 February.
On 10 February, China responded with its own tariffs, including a 10-15% tax on some US agricultural goods.
Beijing has also targeted various US aviation, defence and tech firms by adding them to an “unreliable entity list” and imposing export controls.
The 10% levy doubled to 20% on 4 March.
China has urged the US to return to dialogue with Beijing as soon as possible.
