With President Donald Trump back in office, his idea for a TikTok joint venture could set a precedent for how he expects all Chinese companies to operate in the US.
On Sunday evening, he posted on Social Truth: “I would like the United States to have a 50% ownership position in a joint venture. By doing this, we protect TikTok, keep it in good hands and enable it [stay] up.”
The next day, Trump signed an executive order that gave TikTok an additional 75 days to find a buyer before facing a ban.
While it’s unclear what the United States owning 50% of TikTok means or how it might work, sources told NYNext it’s more likely that Trump will push for a joint venture that would combine TikTok and a company American, sharing profit and risk. It could be a blueprint for how all Chinese-owned companies operate in the United States, the sources added.
This JV could be very similar to the deal Trump put together, and later canceled, in his first term between TikTok and a consortium of US companies. In 2020, Microsoft and Walmart explored a possible deal with the app that could have given them access to TikTok’s audience and their data.
Many US companies granted the right to do business in China – including McDonald’s, General Motors and Boeing – operate as joint ventures, although China has relaxed some of these rules in recent years. Tesla, for example, is allowed to operate independently as a wholly foreign-owned enterprise.
“If an industry is required to be in a JV in China, [a Chinese company in that industry] should be a JV here,” the source said. “Trump loves the reciprocal trade framework…and he likes it [idea].
So far, Trump’s reciprocal trade policy has focused primarily on imposing tariffs.
But sources told NYNext that advisers have floated the idea of President Trump issuing an executive order that would require at least some of the roughly 5,000 Chinese companies operating in the U.S. — such as Temu, Shein and Alibaba — to merge with an American partner.
It’s still unclear whether a TikTok JV would fully meet the terms of the Supreme Court-backed law requiring a full sale of the company by its Chinese parent, ByteDance — or whether the company would agree to a JV or sale.
TikTok seems eager to cooperate for now.
“We thank President Trump for providing the necessary clarity and assurance to our service providers that they will not face any penalties while providing TikTok to over 170 million Americans and allowing over 7 million small businesses to thrive,” the company said in a statement. a statement on Monday, as CEO. Shou Zi Chew attended Trump’s inauguration. “It’s a strong stand for the First Amendment and against arbitrary censorship. We will work with President Trump on a long-term solution that keeps TikTok in the United States.”
A JV would also require some degree of cooperation with China, of course.
Asked about Chew’s willingness, Trump told the White House press corps: “I think he would probably like it because there’s nothing.”
But the Chinese government – which must approve the sale of TikTok – may be less excited and much more selective about who they work with.
Of the companies and people who have expressed interest – which now include Frank McCourt and Kevin O’Leary, Mr. .
“The Chinese government will not allow many people to use it,” said a source close to TikTok.
One person they may be comfortable with is Elon Musk, whose name, according to the Wall Street Journal, has been floated by officials as a potential buyer.
While the Chinese government has denied reports that they would approve the sale of TikTok to Musk — and Musk has never said he’s interested — sources suggest officials want a buyer they know and potentially have leverage with.
“China could have more leverage if Elon were to buy it given his Tesla factory in China,” the source added. “Elon is the best buyer … it has a good relationship with the Chinese government and national security certification for all its companies.”
Another reason why a Musk merger might make sense? It could put together some kind of deal between TikTok and X that could help boost both companies’ revenue and expand the platform. Earlier this week Musk suggested he’s interested in bringing back Vine, the popular short-form video service that shut down in 2017. A deal with TikTok would be a way to get more Vine-like videos on X .
“If he had Trump’s blessing and Elon could buy TikTok… people want a competitor to Zuckerberg,” another source added.
This story is part of NYNext, a new editorial series highlighting New York City’s innovation across industries, as well as the personalities leading the way.