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Trump Won’t Extend Deadline for TikTok to Arrange U.S. Sale

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(Bloomberg) — President Donald Trump said he won’t extend his Sept. 15 deadline for ByteDance Ltd. to sell the U.S. operations of its popular TikTok video-sharing app.

“We’ll either close up TikTok in this country for security reasons, or it will be sold,” Trump told reporters Thursday before boarding the presidential aircraft for a campaign trip to Michigan. “There will be no extension of the TikTok deadline.”

Administration officials had been considering whether to give more time to TikTok’s Chinese owner to arrange a sale of the app’s U.S. operations to an American buyer, though a decision hadn’t yet been presented to Trump, according to people familiar with the matter.

TikTok’s owner, Beijing-based ByteDance, is likely to miss Trump’s Sept. 15 deadline to strike a deal to divest its U.S. operations after new Chinese regulations complicated negotiations with bidders Microsoft Corp. and Oracle Corp., Bloomberg News reported Thursday.

Read more: ByteDance Is Poised to Miss U.S. Deadline for TikTok Sale

TikTok is caught in a clash between the world’s two preeminent powers. Trump has ramped up his pressure campaign on China ahead of what promises to be a hotly contested presidential election in November. U.S. officials have criticized the app’s security and privacy practices, suggesting that user data collected through it might be shared with the Chinese government. TikTok representatives have repeatedly denied such allegations, noting that its data centers reside entirely outside of China.

Analysts and bankers have estimated TikTok’s U.S. business is worth at least $20 billion, although the price would vary widely depending on what is included with the sale. The specific offers from Microsoft, which is teaming up with Walmart Inc., and Oracle, which has won support from venture backers such as Sequoia Capital, could not be determined.

Microsoft declined to comment. Oracle and TikTok didn’t immediately respond to requests for comments.

The real deadline for ByteDance to act remains an open question in the U.S. due to a confusing series of Trump statements and orders. While Trump has said he wants a deal by Sept. 15, the ban on TikTok’s U.S. operations that he signed last month in a bid to force a sale requires the company to act by Sept. 20.

Documentation implementing that ban, possibly under the authority of the International Emergency Economic Powers Act, which allows the president to regulate international commerce in response to any unusual threat to the country, is expected to be made public in the Federal Register around Sept. 20, Bloomberg News reported Sept. 2.

A subsequent order issued by Trump on Aug. 14 on the recommendation of an interagency national security panel requires ByteDance to sell TikTok’s U.S. business within 90 days — giving it until after the Nov. 3 election — further clouded the timeline for a TikTok sale.

ByteDance probably needs beyond the Sept. 20 date to nail down an agreement with any bidder because of China’s regulatory review, Bloomberg News has reported, citing people familiar with the matter. In preliminary talks with Chinese officials, ByteDance has been told any proposal must be submitted for approval with detailed information about technical and financial issues, and the review will be substantial and take time, one of the people said. The officials haven’t been willing to give specific guidance on what kind of deal would work, the person said.

The parties are still racing to present a preliminary deal to the White House before this month’s deadline, though no agreement could be finalized before Beijing’s sign-off. It’s also possible that ByteDance pulls out of a sale altogether if it determines it can’t satisfy both governments, the bidders and its own shareholders.

(Updates with TikTok valuation in sixth paragraph)

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2020-09-10 23:33:00


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