As talks take place over the United States’ acquisition of the Chinese-owned viral video app TikTok, President Donald Trump announced on Monday that any sale resulting from these talks would have to include a substantial payout to the US Treasury.
Trump has slapped the Chinese tech giant ByteDance, which owns TikTok, with a September 15 deadline to reach a deal to sell their operations in the US. If they fail to meet this deadline, TikTok risks being banned in the US.
“The United States should get a very large percentage of that price, because we’re making it possible,” Trump said at a news conference. “Whatever the number is, it would come from the sale, which nobody else would be thinking out but me, but that’s the way I think. And I think it’s very fair.”
It is unclear under what authority could Trump demand such payment from a deal between companies in which the US government does not hold a stake.
Trump referred to the transaction as being similar to a landlord-tenant relationship.
“Without the lease, the tenant doesn’t have the value and well, we’re sort of in a certain way the lease. We make it possible to have this great success.”
The money being paid to the US Treasury would allegedly either come from China or the American buyer.
Microsoft is considered to be a strong contender to purchase the US operations of TikTok as well as its operations in Canada, Australia and New Zealand. There are also two other companies involved in talks to buy the company.
In a blog post released on Sunday about their discussions to acquire TikTok in the US, Microsoft committed to “providing proper economic benefits to the United States, including the United States Treasury.”
According to sources close to the matter, this language was pointing to benefits such as tax revenue and job creation, rather than a special transaction fee.
Although talks between Microsoft and ByteDance are progressing, it will take time before an agreement is reached as both parties must agree on favorable terms for all involved.
President Trump’s ultimatum to either sell the company or risk being banned is unprecedented, even without the additional payout that he insisted on.
“If indeed the US government has been successful in forcing the leading global Chinese social media app to divest its US operations, this sets a potentially dangerous precedent,” said Paul Triolo, the head of global tech policy at Eurasia Group.
“The US is basically saying, any company with a China connection cannot operate in the US if it retains ties to its China-based parent because of data privacy, censorship, or potential use to influence the US political process.”
Meanwhile, as pressure continues to mount on ByteDance to make a decision, the company announced on Monday that it is considering relocating TikTok’s headquarters from the US to London.
“ByteDance is committed to being a global company. In light of the current situation, ByteDance has been evaluating the possibility of establishing TikTok’s headquarters outside of the US, to better serve our global users,” said a spokesperson for the company.
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