Trump Eyes Tariff Cuts to Seal TikTok Deal
US President Donald Trump indicated that he might lower tariffs on China to facilitate a transaction for the sale of ByteDance’s popular short video platform is TikTok. As the April 5 deadline for TikTok’s sale approaches his comments suggest a potential shift in his trade strategy, which could have significant implications for trade relations and economic impact.
Trump said at a news briefing on Wednesday is that “Maybe I’ll give them a little reduction in tariffs or something to get it done.” According to this statement, the president is thinking about lowering tariffs in an effort to persuade China to allow the sale of TikTok to a non-Chinese buyer.
Additionally, Trump hinted that he would extend the deal’s deadline on April 5. Due to national security concerns ByteDance must either sell TikTok’s US business or risk being banned under a 2024 law signed under the Biden administration. Trump bought extra time for negotiations in January by delaying the implementation of this statute.
Trump now actively uses TikTok, despite previous attempts to prohibit the app. He claims to have earned billions of views on TikTok, which he attributes to expanding his presidential campaign reach. His account has accumulated over 15 million followers.
China’s Approval Remains a Major Hurdle
Although the US government has advocated for the sale of TikTok, Beijing’s consent is still the largest obstacle. Due of ByteDance’s close ties to China, efforts to compel the company to sell its US operations have faced resistance from the Chinese government in the past. Chinese regulatory permission is likely to be necessary for any deal, which has hampered past negotiations.
With an estimated 170 million users in the US, TikTok has been at the epicenter of Washington-Beijing geopolitical tensions. China views the action as an effort to undermine one of its most prosperous international IT businesses, while US senators justify the pressure on ByteDance to sell the app by pointing to national security concerns.
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Trump’s New Tariffs Could Worsen Trade Relations
Trump has intensified the US-China trade conflict while implying that tariffs will be lowered to help close the TikTok agreement. His announcement of a new 25% tariff on all imported automobiles and auto parts on Wednesday may worsen economic ties with China and other international trading partners.
This comes on top of a series of tariff increases that have intensified trade tensions:
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On 4 February, the US doubled tariffs on all imports from China to 20%.
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On 10 February, China retaliated with 10-15% tariffs on US agricultural products.
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On 4 March, China raised tariffs to 20%, further escalating the dispute.
In addition to tariffs, China has blacklisted multiple US companies in aviation, defense, and technology, adding them to an “unreliable entity list” and imposing export controls.
China Urges Diplomacy Amid Growing Tensions
China has demanded that the US return to the bargaining table despite the escalating trade war. Although Beijing has indicated that it is amenable to talks, it is still uncertain if it will consent to a sale of TikTok on US conditions.
The TikTok merger is a political and economic opportunity for Trump. While keeping a tough position on China appeals to his base, brokering an agreement might be hailed as a victory for his administration ahead of the 2024 presidential race.
In the US, TikTok’s future is still up in the air as the deadline of April 5th draws near. It remains to be seen whether Trump’s tariff policy will result in a breakthrough or exacerbate trade tensions between the US and China.
