A deal to spin off TikTok’s US assets has been put on hold after China signaled it would not approve the agreement. This came shortly after President Donald Trump announced new tariffs on Chinese goods, according to two sources familiar with the matter.

The plan aimed to create a US-based entity with majority American ownership, reducing ByteDance’s stake to under 20%. It had been agreed upon by ByteDance, its investors, and the US government but still required Beijing’s approval.

Trump extended the deadline by 75 days to mid-June following the 34% tariff hike, which raised the overall rate to 54%.

The proposed divestment is part of a 2024 law requiring ByteDance to sell its US operations or face a ban, due to national security concerns over Chinese influence.

The White House is in talks with non-Chinese investors, including Susquehanna International Group and General Atlantic, to meet the ownership threshold.

China’s embassy criticized the move, while TikTok declined to comment. Trump indicated he is open to negotiating tariff reductions to help finalize the deal.

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