On January 20th, following his return to the White House, President Trump signed an executive order to delay the enforcement of a law banning TikTok in the United States until early April. This delay provides an opportunity for TikTok to strategize how to allow the U.S. to control the application through a “joint venture” method within his new government. Despite these efforts, challenges lie ahead in terms of legal and procedural obstacles, leaving many questions about the future of TikTok in the U.S.
President Trump’s executive order, signed on January 20th, directed his Attorney General not to enforce the TikTok ban, granting TikTok an additional 75 days for his new government to “determine a course that protects the national security while avoiding the abrupt shutdown of a communications platform used by tens of millions of Americans.”
A bipartisan law known as the “sell or ban” law, which went into effect on January 19th, requires TikTok to spin off from its Chinese parent company ByteDance or face a complete ban in the U.S. The Supreme Court upheld this law on January 18th, ruling that it did not violate the First Amendment protections of freedom of speech.
Following the Supreme Court decision, the incoming Biden administration indicated its intention not to enforce the law but to leave the enforcement to the incoming Trump administration.
Despite this, TikTok took precautions, temporarily shutting down its application in the U.S. over the weekend. American users were no longer able to access TikTok just hours before the ban came into effect on January 18th.
After a 12-hour “blackout,” President Trump, who was set to be inaugurated the next day, announced a plan to sign an executive order to temporarily suspend the TikTok ban. Subsequently, TikTok began partially restoring services to American users starting on the 19th.
According to the executive order signed by Trump on the 20th, the Justice Department is prohibited from taking action against any entity that may have violated the ban during the period between the 19th and the evening of the 20th when the order was signed.
When asked about national security concerns related to TikTok, Trump indicated a desire for the U.S. to own half of TikTok.
President Trump, while signing the executive order in the Oval Office, told reporters present, “If I don’t approve TikTok, it will be worth zero, it has to shut down, that’s what I was told by the people who own it.”
“If I make this deal, it could be worth a trillion dollars. If I do this deal for the United States, I think we should get a cut, we should really get something out of it, right? We should have right to 50% of TikTok. Congratulations, you have a good partner with TikTok.”
Trump believes that compared to other threats from China, TikTok is not the “biggest issue.”
He said, “Look at the phones that are made in China and all the other things that are made in China, including military equipment. I think TikTok is not the biggest problem.”
On the 19th, Trump proposed a “joint venture” between the U.S. and TikTok, where the joint venture, established by the U.S. and selected buyers, would have the U.S. hold 50% ownership.
Trump considered the timing of the TikTok ban coming into effect just a day before his inauguration as unfortunate. He stated, “It interfered with my ability to assess the impact of the law on national security and foreign policy before it took effect.”
“This timing also affected my negotiating capacity to reach a solution to prevent the sudden shutdown of the TikTok platform while addressing national security concerns.”
Both Trump’s executive order delaying the TikTok ban and his proposal for a joint venture face potential legal obstacles, as the Justice Department is responsible for enforcing federal laws, and the President lacks the authority to overturn laws passed by Congress and upheld by the Supreme Court.
Frank Pallone, a senior member of the House Energy and Commerce Committee and a Democratic Federal Congressman from New Jersey, expressed serious concerns to the “Congress Hill Report” that Trump is trying to circumvent bipartisan legislation passed in favor of national security.
While the “sell or ban” law regarding TikTok grants the U.S. President some discretion and allows for a 90-day extension of the ban, Trump’s executive order may face legal challenges as the deadline for significant progress in selling TikTok’s U.S. operations passed on January 19th, making his order vulnerable to legal disputes.
On the evening of January 20th, Trump noted during the signing of the executive order in the Oval Office that the law “gives the President the right either to make a deal or to close it down and we have 90 days to make a decision.”
According to the Associated Press, the Electronic Frontier Foundation, a digital rights organization, filed a non-party brief on January 21st supporting the TikTok ban. The foundation believes that ignoring the law would be “unconstitutional.”
David Greene, the organization’s Civil Liberties Director, stated in a release, “Unless Congress repeals the law, there is no winner in this situation.”
On January 19th, Republican Senator Tom Cotton from Arkansas posted a message on X platform listing entities that might challenge Trump’s executive order to enforce the TikTok ban. However, it remains unclear if anyone plans to challenge Trump’s order.
In his executive order, Trump issued a warning that any attempt by states or private entities to enforce the TikTok ban would constitute an “encroachment on Presidential executive power.” This seems to be aimed at discouraging potential lawsuits.
Though Trump’s order delays the TikTok ban, app stores like Apple and Google, and cloud computing companies like Oracle that provide internet hosting services for TikTok, have not resumed offering TikTok due to legal constraints. Violating the TikTok ban could lead to fines of up to $850 billion.
Even if Trump’s extension order faces challenges, it provides ByteDance and TikTok with time to devise their next steps, offering a brief respite.
On January 20th, Trump mentioned seeking U.S. government mediation for a deal to acquire half of TikTok’s control, noting that “every rich person” had called him to discuss purchasing the social media platform.
According to the “Congress Hill Report,” former owner of the Los Angeles Dodgers, Frank McCourt’s “Project Liberty” has submitted a bid for TikTok. He stated on January 21st that his proposal is the “only legally sound solution.”
McCourt stated in a release, “Specifically, qualified divestiture requirements entail selling TikTok to a clean, U.S.-manufactured technology stack-owning U.S. buyer and relinquishing TikTok’s algorithm.”
The TikTok algorithm is developed and maintained by Chinese engineers at ByteDance, which has been a major concern in the U.S.
Trump’s executive order states that the U.S. government must conduct a review to assess government intelligence and the measures taken by TikTok to address Washington’s concerns.
McCourt also mentioned in his statement, “‘Project Liberty’ possesses a verified technology stack that is in operation and offers a clear path for addressing Congressional national security concerns while keeping TikTok operational.”
Cayce Myers, a public relations professor at Virginia Tech, told the “Congress Hill Report” that while Trump’s proposed 50% ownership offer seemed somewhat “unusual,” it may represent a starting point in negotiations.
Myers said, “I think he (Trump) views this extension as leveraging the ban to gain equity or benefits for America. But this is indeed an unprecedented strategy, potentially leading to unprecedented outcomes for such events.”
According to TikTok, approximately 60% of ByteDance’s private stock is held by global investors such as General Atlantic and Susquehanna International Group. ByteDance employees and the company’s founder Zhang Yiming also hold 20% each.
ByteDance has never publicly disclosed the financial details of its subsidiaries, including TikTok’s global or U.S. operations.
Last year, Beijing denounced as “banditry” Washington’s demand for ByteDance to divest TikTok. However, after Trump was inaugurated as President for a second term on January 20th, Beijing hinted at a possible softening of its stance.
Chinese Foreign Ministry spokesperson Hua Chunying stated on January 20th that business operations and acquisitions should be independently decided by companies based on market principles, although she added, “If it involves Chinese companies, they should comply with Chinese laws and regulations.”
Trump threatened that if Beijing refused to sell TikTok, he would levy tariffs of up to 100% on Chinese goods. On the 20th, Trump stated that if China rejected the TikTok sale agreement, he would consider it somewhat “hostile behavior.”
Since the “sell or ban” law was passed by Congress in April last year, ByteDance has consistently stated there are no plans to sell TikTok and has engaged in legal battles over several months regarding the law.
Now, with the softened stance of the CCP government, ByteDance may reconsider its plans, offering a potential turning point for the sale of TikTok.
Gabriel Wildau, Managing Director of Teneo Consulting, a consulting and advisory firm for global CEOs, stated in a report that through friendly negotiations, Beijing may ultimately approve the export of TikTok’s algorithm.
However, Wildau also believes that excluding the sale of the algorithm may be more feasible legally and technically.
Dan Ives, an analyst at Wedbush Securities, a wealth management advisory firm, told the Associated Press, “This is a high-stakes poker game. TikTok is a bargaining chip in broader U.S.-China negotiations.”
The Associated Press notes that there may be extensive negotiations in the future regarding the sale of TikTok.