Why does China’s TikTok matter so much to Donald Trump?

It appears US President Donald Trump is doing all he can to save TikTok, the hugely popular video-sharing app owned by Chinese Internet company ByteDance. It's unusual because not long ago Trump had wanted to ban it. In a desperate bid to make TikTok American, he said on Wednesday he would be willing to reduce tariffs on China if it allows ByteDance to sell the app to an American buyer.

However, AFP has reported that China has rebuffed Trump's offer, with its foreign ministry saying that it has "repeatedly stated our position" on TikTok. "The Chinese side's stance against imposing additional tariffs is also consistent and clear," foreign ministry spokesman Guo Jiakun said.

A US law during the Biden administration ordered TikTok to divest from its Chinese owner ByteDance or be banned in the US, enacted over concerns that Beijing could exploit the video-sharing platform to spy on Americans or covertly influence US public opinion. The law took effect on January 19, a day before Trump's inauguration. TikTok temporarily shut down in the US and disappeared from app stores as the deadline for the law approached, to the dismay of millions of users. Trump suspended its implementation for two-and-a-half months after beginning his second term on January 20, seeking a solution with Beijing. TikTok subsequently restored service in the US and returned to the Apple and Google app stores in February. Trump's reprieve to TikTok is set to expire on April 5.


Why did Trump change his stance on TikTok from wanting to ban it to going all-out to save it?

Why Trump wants to save TikTok
During his first term, Trump issued executive orders banning TikTok and the Chinese messaging app WeChat. Courts subsequently blocked the moves. Trump ended up joining the app last year and has grown his following to nearly 15 million users. He has credited TikTok, which is used by 170 million Americans, with helping him win the support of more young voters in last year’s election. “I have a warm spot in my heart for TikTok,” he said during a December news conference. “TikTok had an impact.” Apparently, he wants to save TikTok to retain his popularity among the youth or perhaps turn it into another Twitter, a social media app favourable to him.

“This is one of those things where the domestic politics has become so upside down and crazy that it turns out there’s only upside for Trump now,” Bill Bishop, a China expert who has been closely following the back-and-forth, had told AP in January when the ban on TikTok came in effect. If the ban ends up being enforced, he said, Trump will say it was on outgoing President Joe Biden’s watch. “And if it does come back then Trump is a savior. And he will be rewarded both by users” as well as the company, which he said is now “beholden to Trump” and will have an incentive to make sure content on the platform is favorable to him.

Twitter, after Elon Musk bought it, was seen as one of the biggest social media backing Trump during his campaign last year. With both Twitter and TikTok favourable to Trump, he can have a very wide reach for his messaging.

However, there could be more to Trump's all-out efforts to save TikTok than the desire to keep his new youth voter base happy.

During a March interview with CNBC, Trump said he still believed TikTok posed a national security risk but opposed banning it because doing so would help its rival, Facebook, which he has continued to lambast over his 2020 election loss, AP had reported in November last year. He also denied changing his mind on the issue because of Republican megadonor Jeff Yass, an investor in TikTok parent company ByteDance who Trump, at the time, said he had only met “very briefly.” He said Yass “never mentioned TikTok” during their meeting.

Still, ByteDance – and groups connected to Yass – have been attempting to exert their influence, as per the AP report. Citing lobbying disclosure reports, the report said that last year ByteDance paid veteran lobbyist and former Trump campaign aide David Urban $150,000 to lobby lawmakers in Washington in favor of TikTok. The company has also spent more than $8 million on in-house lobbyists and another $1.4 million on other lobbying firms, according to Open Secrets. Meanwhile, in March last year, Politico reported Kellyanne Conway, a former senior Trump aide, was being paid by the Yass-funded conservative group Club for Growth to advocate for TikTok in Congress.

So, Trump may have several reasons to save TikTok by having an American company buy it and remove it from Chinese control.

Will TikTok shut down in the US after April 5?
The White House has been involved to an unprecedented level in the closely watched deal talks, effectively playing the role of investment bank. The turmoil at TikTok has attracted several potential buyers, including former Los Angeles Dodgers owner Frank McCourt, who have expressed interest in the fast-growing business analysts estimate could be worth as much as $50 billion. Nearly two weeks ago, Trump said that his administration was in touch with four different groups about TikTok's sale, and that all options were good.

Reuters reported last week that White House-led talks among investors are coalescing around a plan for the biggest non-Chinese backers of ByteDance to increase their stakes and acquire the video app's US operations, according to two sources familiar with the discussions.

The plan entails spinning off a US entity for TikTok and diluting Chinese ownership in the new business to below the 20 percent threshold required by US law, rescuing the app from a looming U.S. ban, the sources told Reuters.

Jeff Yass' Susquehanna International Group and Bill Ford's General Atlantic, both of which are represented on ByteDance's board, are leading discussions with the White House on the plan, the sources told Reuters. Private equity firm KKR is also participating, one of the sources said.

Artificial intelligence (AI) startup Perplexity recently expressed its interest in buying TikTok. Perplexity laid out in a blog post a vision for integrating its AI-powered internet search capabilities with the app. "Combining Perplexity's answer engine with TikTok's extensive video library would allow us to build the best search experience in the world," the San Francisco-based firm said.

If TikTok is not sold to an approved buyer by April 5, the original law that bans it nationwide would once again go into effect. However, the deadline for Trump;s executive order doesn’t appear to be set in stone and the president has reiterated it could be extended further if needed. Three Democratic senators on Monday urged the White House to seek authority from Congress to extend the deadline for to sell TikTok to safeguard the app from a potential ban.

(With inputs from agencies)