China’s ByteDance is currently facing an uphill struggle to convince the United States to try and keep the majority ownership of its popular short video app TikTok in the U.S., former national security officials and regulatory lawyers confirmed.
Last month, U.S. President Donald Trump ordered ByteDance to sell TikTok with there being plenty of concerns when it comes to the personal data of around 100 million Americans that use the application, which could be passed on to China’s Communist Party government.
Trump has also threatened to ban TikTok throughout in the U.S. as early as September 20 if the Chinese company does not comply.
ByteDance has put forward a plan to U.S. officials to try and keep a majority stake in TikTok’s global business and create a headquarters in the U.S., according to reports.
However, the proposal is still under review from the Committee on Foreign Investment in the United States, with this being a U.S. government panel chaired by the U.S. Treasury Department.
Trump told reporters at the White House on Wednesday that he does not like the idea of ByteDance keeping a majority ownership of TikTok.
If Trump were to approve the deal, he would have to amend an executive order he signed on August 14, directing ByteDance to divest TikTok in the U.S., something that no other U.S. President has ever done throughout the history of national security reviews, according to CFIUS experts.
Aimen Mir, who oversaw CFIUS reviews between 2014 and 2018 as Deputy Assistant Secretary for Investment Security at the U.S. Department of the Treasury, and is now a partner at law firm Freshfields Bruckhaus Deringer LLP said that “After CFIUS made a recommendation to the President and the President issued an executive order requiring divestment, it would be unprecedented for the parties to negotiate a solution short of a divestment, though it would clearly be within the authority of the President to modify his order”.
However, ByteDance and the U.S. government did not respond to any requests for comment.
CFIUS has also allowed foreign firms to keep sensitive U.S. assets on numerous occasions, by imposing oversight and restrictions on how they are managed and operated.
ByteDance had signed a letter of intent with Microsoft Corporation in July that contemplated the sale of that business to the Redmond, Washington-based company.
However, despite this, Microsoft stated on Sunday that ByteDance had turned down the offer, and so there are still plenty of uncertainties whether the Chinese firm would shed most of its ownership of TikTok to seal a deal with the U.S. government.