Donald Trump says Oracle’s TikTok deal is off if ByteDance keeps control
- Trump tells Fox News that if ByteDance tries to keep control of the app, ‘we just won’t make the deal’
- Later on Monday, Trump says that he has ‘given a preliminary OK’ to the deal, departing again from his earlier remarks
Speaking in an interview on Fox News, Trump said he would not support the deal if the Chinese owner ByteDance retains control of TikTok. ByteDance “will have nothing to do with it, and if they do, we just won’t make the deal,” Trump said.
“They are going to buy it,” he said, referring to Oracle and Walmart. “They’re going to have total control over it. They’re going to own the controlling interest. And if we find that they don’t have total control, then we’re not going to approve the deal.”
Trump also indicated that he expected Chinese influence to be diluted by a public offering of TikTok Global, which an offering process has started.
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Soon after Trump’s Monday comments, Hu Xijin, editor-in-chief of the China state-affiliated Global Times, tweeted that Beijing would likely reject the deal “because the agreement would endanger China’s national security, interests and dignity”.
Global Times is a tabloid run by People’s Daily – the flagship newspaper of the Communist Party.
Later on Monday, Trump said, when asked by a reporter about the deal, that he has “given a preliminary OK” to the deal, departing again from his earlier remarks.
“That’s working its way through” and “we have to have total security,” he said, without elaborating how data will be secured under the deal.
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The rapid-fire comments from both sides reflected the critical stage the deal has entered to hash out an agreement that would keep both Washington and Beijing happy, a likely delicate balance.
The Trump administration requires the US operations of TikTok, which has more than 100 million US users, to be owned by an American owner to protect sensitive data for national security reasons. China has recently updated its tech export control rules that requires Beijing to sign off on foreign ownership of Chinese technologies such as the algorithm TikTok uses.
The owner of TikTok has faced pressure in China for giving in to the Trump administration too easily as the discussions to sell its US business to an American buyer ramped up.
In a post on news site Jinri Toutiao, ByteDance also denied the company had committed US$5 billion in taxes to the US Treasury or to create a US$5 billion education fund in the US as conditions of the deal.
“The so-called US$5 billion to the US Treasury was just a forecast of the corporate income tax and operating taxes that TikTok needs to pay in the following years,” ByteDance said. And the figure will depend on TikTok’s business development in the US, it said.
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On Saturday, Trump said TikTok US “will be totally controlled by Oracle and Walmart” and “the security will be 100 per cent”.
When Trump insisted in August that ByteDance sell the app’s US operations, he was aiming for a clear-cut deal that would hand him a win over China. Trump said that TikTok’s Chinese owner can turn users’ personal data over to the Chinese government. Failing to reach a deal will result in a ban of the app in the US.
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Trump’s Saturday comment won TikTok a reprieve, temporarily suspending the Commerce Department’s announcement earlier in the week that would ban new downloads in the US of the app as of September 20.
The ban was delayed by seven days to September 27, Commerce Secretary Wilbur Ross said over the weekend.
Oracle, which has close ties to the Trump administration, emerged late in negotiations, edging out Microsoft in a bid.
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Under the current structure, TikTok founder Zhang Yiming will remain on the board. Walmart chief executive Doug McMillon will become a director. TikTok Global is likely to be headquartered in Texas and will hire at least 25,000 people, said Trump.
The price tag for TikTok has been a moving target ranging from US$20 billion to US$60 billion.
Oracle will get full access to review TikTok’s source code and updates to make sure there are no back doors used by the company’s Chinese parent to gather data.
