MW TikTok and Trump: The app looks set to survive the next government deadline and stay alive in the U.S.
By Victor Reklaitis
TikTok has until April 5 to make a divestiture deal - perhaps involving Oracle - but analysts say Trump is likely to give it more time
One of President Donald Trump's first moves at the start of his second term was to throw a lifeline to TikTok - and analysts are now expecting a repeat performance as a key deadline nears for the video-sharing app.
A Trump executive order on Inauguration Day said that for 75 days, the Justice Department should not enforce a bipartisan law that aims to ban TikTok nationwide as long as it remains controlled by its Chinese parent company, ByteDance Ltd. The order in part aimed to give time to reach some sort of deal for running TikTok's U.S. business, with Trump at the time voicing support for the federal government getting a 50% stake.
With that 75-day period due to end April 5, analysts now say the most likely next step is another effort by Trump to delay a U.S. ban so there can be more time to finalize a deal. Multiple published reports have said there could be an agreement that sees software giant Oracle Corp. $(ORCL)$ run TikTok's American operations - though China hawks are concerned whether the agreement will meet their law's requirement that foreign ownership must be under 20%.
"I really doubt they're they're going to have every single 't' crossed and 'i' dotted by April 5," said Michael Sobolik, a senior fellow at the Hudson Institute, a conservative think tank. Sobolik said "some sort of another extension" is the most likely scenario. Vice President J.D. Vance, who is working on the TikTok issue with Trump's national security adviser, Mike Waltz, has made remarks about wanting to have a deal by April 5 - but he's also signaled that details are still getting worked out and given himself wiggle room, the Hudson Institute expert added.
It's possible, but unlikely, that there will be a totally finished TikTok deal before April 5, Sobolik reckons. It's "completely unlikely" that TikTok will go dark on that day, he told MarketWatch.
Matt Schettenhelm, an analyst at Bloomberg Intelligence, also said some sort of extension from Trump is the most likely next step. He said such a move would allow more time to complete a deal, or it could be necessary because that deal doesn't comply with the bipartisan law targeting TikTok, which was enacted a year ago and is known as the Protecting Americans from Foreign Adversary Controlled Applications Act.
Schettenhelm told MarketWatch that he has doubts over whether any finalized agreement will meet the terms of the law, so Trump may need to ask Congress to revise the measure. The analyst said the "lack of resistance" to Trump's work on the TikTok issue stands out to him at the moment, especially after the strong bipartisan support for taking a tough stance on the app last year due to national-security concerns. There are indications of pushback from a couple of influential Republican lawmakers - Sen. Tom Cotton of Arkansas and Rep. John Moolenaar of Michigan - but Schettenhelm doesn't sound impressed.
"It's something, but I think it's going to take more than that," the Bloomberg Intelligence analyst said. Referring to U.S. lawmakers overall, he said: "I'm just increasingly skeptical that they're going to stand up to what may be coming before or around April 5."
Related: Trump says there are bigger China threats than TikTok. Here's where he could be going wrong.
The Hudson Institute's Sobolik said he thinks Trump was right in his first term when he laid out the security risks with TikTok, adding he's concerned that an upcoming deal won't address those risks. At the same time, Sobolik said he thinks it's important for China hawks such as himself to keep an open mind until there are more details available about any final agreement. He also sees the potential for real pushback from the House of Representatives and Senate, which are both narrowly controlled by Trump's Republican Party.
"I think the administration would be making a mistake if they think they can just roll Congress on this. I don't necessarily think it's going to be that easy for them," said Sobolik, who is the author of the 2024 book "Countering China's Great Game: A Strategy for American Dominance."
When asked about a potential TikTok deal involving Oracle, Trump's White House press secretary, Karoline Leavitt, said Wednesday that the TikTok issue is a high priority for the president but the administration wasn't yet ready to make an announcement.
Despite TikTok's impact on U.S. rivals, no lawsuits so far
Analysts have estimated that TikTok had about $10 billion in U.S. advertising revenue last year - and that if the platform were to go away for its 170 million U.S. users, most of that revenue could go to Facebook and Instagram parent Meta Platforms Inc. $(META)$ or YouTube parent Alphabet Inc. $(GOOG)$ $(GOOGL)$
Pinterest Inc. $(PINS)$, Snapchat parent Snap Inc. (SNAP) and Reddit Inc. (RDDT) also have been viewed as possible beneficiaries from a TikTok ban. There are downsides for U.S. public companies as well; Oracle - which counts TikTok as a major customer - warned in June that it could be hurt if TikTok is banned in the U.S.
Schettenhelm said he has been surprised that TikTok's American rivals so far don't appear to have helped with any lawsuits challenging Trump's Jan. 20 executive order.
"The strongest potential suit would have been from TikTok users who are concerned about their data going back to China," he said. "I would have thought that TikTok competitors in the U.S. would have had an interest in, behind the scenes, encouraging them to do that, but so far there's been radio silence in the courts and no challenge along those lines."
From MarketWatch's archives (Feb. 13, 2025): TikTok returns to Apple and Google app stores. Why that's an $850 billion risk.
-Victor Reklaitis
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March 20, 2025 13:42 ET (17:42 GMT)
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