China scuttles TikTok deal as Trump admits Beijing ‘not very happy’ about tariffs

Representatives from ByteDance, the social media platform’s Chinese parent company, said approval for the transaction has been withdrawn.

The deal was designed to address security concerns by separating TikTok from its parent company. Picture: AP

Beijing has scuttled a plan overseen by Donald Trump to spin off TikTok to American investors friendly with the president as China widens its counter-attack after it was targeted with huge new tariffs by Washington.

The Trump administration’s TikTok deal was to have been announced on Saturday when a deadline for the controversial social media company’s operation in America was due to expire.

Those plans were dashed as representatives from its Chinese parent company ByteDance said Beijing had withdrawn its approval for the transaction after Trump announced a new 34 per cent tariff on goods from China starting next week. Adding to earlier imposts, they take the total American tariff rate on Chinese goods to 65 per cent, a devastating blow for the country’s exporters.

“We hope to continue working in Good Faith with China, who I understand are not very happy about our Reciprocal Tariffs,” Trump wrote on his Truth social media account, as he announced a further 75-day extension to allow TikTok to operate in America.

“We do not want TikTok to ‘go dark.’ We look forward to working with TikTok and China to close the Deal,” he added.

Xi Jinping’s China has fired back at Donald Trump’s tariff plan in an escalating global trade war that sent markets deep into the red. Picture: AFP

A spokesman at the Chinese embassy in Washington said that Beijing has previously made its position on TikTok clear.

“China has always respected and protected the legitimate rights and interests of enterprises and opposed practices that violate the basic principles of the market economy and harm the legitimate interests of enterprises,” spokesman Liu Pengyu said in a statement.

“China’s opposition to the imposition of additional tariffs has always been consistent and clear,” he added.

Hours earlier, Beijing surprised Washington with a new 34 per cent tariff on all American goods, which tanked markets and made China the first country in the world to counterpunch after Trump’s “Liberation Day” announcement.

China’s Ministry of Commerce said on Friday that its reciprocal tariff would be imposed on all US imported goods from April 10, a day after America’s new levies come into effect.

Beijing also announced restrictions on a slew of rare earth exports along with a probe of the China subsidiary of DuPont, the US chemicals giant.

The S&P 500 tumbled 6 per cent on Friday as Wall Street’s worst crisis since the Covid crash deepened. The NASDAQ fell 5.8 per cent.

Analysts were surprised by the heft and speed of China’s response, with many warning the world’s two biggest economies were on the path to a full blown trade war.

“This is an aggressive, escalatory response that makes a near-term deal to end the trade war between the two superpowers highly unlikely,” said Leah Fahy, a China expert at Capital Economics.

Trump took to all-caps as he responded on social media. “CHINA PLAYED IT WRONG, THEY PANICKED – THE ONE THING THEY CANNOT AFFORD TO DO!”

US Treasury Secretary Scott Bessent had earlier warned countries that there would be consequences for retaliation. “My advice to every country right now is do not retaliate. Sit back, take it in, let’s see how it goes. Because if you retaliate, there will be escalation,” he said.

Alicia García-Herrero, chief economist for Asia-Pacific at Natixis, said Beijing’s quick response suggested it was trying to position itself to be first in line for high-level negotiations with Washington.

Xi and Trump have still not spoken since Trump was inaugurated in January.

Taking a different approach, Vietnam’s leader To Lam spoke on Friday in a call Trump said was “very productive” as the Communist Party general secretary tried to get Washington to reduce the 46 per cent tariff it has scheduled to begin next week.

In another social media post, Trump said the Vietnamese leader had said he wanted to cut tariffs on American products to zero as part of a broader deal. “I thanked him on behalf of our Country, and said I look forward to a meeting in the near future,” Trump said.