Reports have suggested that the Chinese government will prefer Tiktok to shut down its U.S. operations instead of selling it to a U.S. company.
This has threatened the ongoing agreement between the Chinese tech unicorn ByteDance with a U.S. company as the Chinese government plans to oppose this transaction.
This news was first reported by Reuters. Moreover, this divestment of TikTok isn’t any regular business transaction. Instead, the U.S. government is demanding the deal as President Donald Trump directs the executive and foreign policymaking through executive fiat. Trump has also demanded that the American government should also get some portion of the final price. However, we aren’t sure if this is legal or not.
This tussle is just another example of China and America sparring against each other for economic supremacy. Previously the U.S. government banned Huawei. Moreover, this deal is a flashpoint between the two countries with many companies stuck in the middle, like Byte Dance, Microsoft, Walmart, and Oracle. The Trump administration has given Mid-September as the time when there will be a deal, however, it isn’t clear whether the government will be able to meet the deadline.
The U.S. isn’t the only country taking steps to end Chinese influence across the borders. India has banned Tiktok in its country, along with several other Chinese-based applications.
The deal has also pressure from the changing regulatory environment in China. The country’s autocratic leadership may change the rules that could influence Tiktok which could limit its sale.
For ByteDance, this situation is nothing short of a nightmare. Moreover, Microsoft isn’t happy with the cold war going on between the two countries. For the Chinese authoritarian government, this deal might feel like a submission. Thus, if the deal happens, it will be quite surprising for everyone. Let’s wait and see what becomes of this deal.
