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On April 3rd, TikTok was close to a deal. This was two days before the social media company faced a federal deadline, sell to a non-Chinese company or get banned in the U.S. New York Times reporter Sapna Maheshwari says the pieces were moving into place for a sale.

From what we've heard, this deal was on paper. There was a really long document that laid out terms and conditions. Investors had said they were on board. The Trump administration, most importantly, thought this thing was buttoned up and thought that they would be announcing a deal by the end of the week.

And then the next day, President Trump announces he's extended the deadline to find a buyer for TikTok for another 75 days. What happened in between those two things? The thing that we are all staring at right now, tariffs happened. My fellow Americans, this is Liberation Day. Waiting for a long time.

President Trump's tariffs sunk in, China retaliated with its own tariffs, and the deal was pulled. China looked at what Trump was doing

announcing and said, you know what? You need our sign off to do any kind of a deal with ByteDance, which is a private company based in China and deals off. We're not agreeing to this. Good luck. Try again. You know, this TikTok saga has been going on for so many years. We've had you on the show so many times. We've talked about this

Ad nauseum, every time it feels like either TikTok is about to be banned or sold, something dramatic happens. Is this saga ever going to end?

It's hard to see what shape a resolution will take. I mean, even someone at the company who's been there for some time was joking to me that this company is like a cat with nine lives. He's like, we're on probably seven right now. So who knows? Maybe there's two more lives to go here. I think, you know, what's different this time around is there is this energy from the Trump administration to make this deal. But

An analyst that I talked to last week thinks that Trump could also be laying the groundwork to eventually support a TikTok ban and blame it on China. Today on the show, deal, no deal, or trade war casualty? Which will it be for TikTok? I'm Lizzie O'Leary, and you're listening to What Next TBD, a show about technology, power, and how the future will be determined. Stick around.

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That's 20% off any AquaTrue water purifier when you go to AquaTrue.com and use the promo code TBD. Let's rewind the clock back to 2020, the final year of the first Trump administration. TikTok is exploding in popularity, thanks in large part to the COVID-19 pandemic.

That popularity leads lawmakers of all stripes to take a closer look at ByteDance, TikTok's Chinese parent company, and to start asking questions about the company's ties to the Chinese government, including one Donald J. Trump.

At that time, Trump brought up the same national security concerns that lawmakers have been beating the drum on for the past year. He said TikTok's Chinese ownership was an issue. They could steal the data of Americans. He didn't actually talk as much about the propaganda concern that's become bigger in the past year and a half.

But at that time, he was pushing for TikTok to be sold to American companies and a bunch of really big ones threw their hats in the rings. That was Walmart, Microsoft, Oracle. They were all ready to do a deal. But actually, that time as well, China came forth and

They seem to put TikTok's video recommendation technology, the algorithm basically, on this list of technology that couldn't be exported from China. These are the export controls. Exactly.

Exactly. So this wrench was thrown into the plan. And I mean, things got so far as to a deal actually being announced. It was announced that Walmart would be a part of this thing. Oracle would take over TikTok America. But then it all sort of faded away in all of the talk around the election, the Biden administration taking over. And once Biden was in office, the deal was just sort of shelved.

And this problem for TikTok seemed to sort of go away. How would you say the Biden administration viewed TikTok? I think that it took them a little while to wrap their heads around it. A lot of what happened between the Biden administration and TikTok, we really learned through the lawsuit that TikTok filed to fight this law targeting the company in the last year. So we learned from those documents that

the Biden administration and TikTok's lawyers and executives, et cetera, were meeting pretty regularly to try and hammer out, you know, what are these security concerns? Where is the algorithm based? How many engineers are based in China? And they went back and forth. And ultimately, over the course of a couple of years, they

they couldn't come to a resolution. And I think the simplest way to boil it down is just it was a matter of trust. Even though TikTok and ByteDance made all these assurances, like here's where the data is stored, here's how we oversee the algorithm, here's a special kill button we can give the U.S. government if we do something wrong. The government said, listen, we at the end of the day don't trust China. We don't trust you and we don't think this is enough.

And that's what ultimately led to the Biden administration, you know, having some people who actually worked on this law that targeted TikTok. Right. This law is passed in April of last year, called for TikTok to divest or for the app to be banned in the U.S. in nine months. And the thing that fascinated me was that President Trump then suddenly is on the side of TikTok. Like,

Why do you think he went through this whole confusing narrative arc? Yeah, it's this huge change of heart and really speaks to, I think, TikTok's luck as a corporation that this happened, right? Trump viewed TikTok as really important in helping him get elected last year. He had a lot of fans on there, still does. And it's interesting to me that TikTok went

from a bogeyman to less than a year later, it was viewed as this tool that may have helped Republicans win in the election. And so I think Trump really started to view it as an app that he liked. From what I understand, his son is also a fan of some of the sort of manosphere types who are on TikTok.

And I don't think those things are unimportant. I mean, he has one of his grandkids on there, too. Which brings us to now. One of the first things that President Trump did in office was extend the TikTok sale deadline by 75 days. Then he asked Vice President J.D. Vance to put together a deal to sell TikTok to a non-Chinese buyer. But doing that within the parameters of the law passed by Congress is not easy. I think the people who drafted this law...

We're really looking to some sort of traditional sale, whether it was from some independent party, maybe a billionaire or a company like Amazon, which from what we understand did actually submit a bid for TikTok. But the structure that the JD Vance team seemed to be pursuing was a little bit different. What they were looking at was bringing new investors on board to reduce the Chinese ownership

of TikTok, but avoid maybe an outright sale the way you or I might think about it. And so it seemed to be leading towards the creation of this new TikTok USA entity with new investors brought on from really brand name firms like Blackstone and Andreessen Horowitz, and then taking the existing investors and having them sort of roll over their bite dance steaks and

and still having some Chinese investments, but having them a little bit smaller. And honestly, there's still questions around what was going to happen to the algorithm and how that would be sort of licensed from ByteDance or how they would sort of manage to comply with the law while keeping the kind of TikTok-iness we all know and enjoy. How close was this deal to actually being inked? From the Washington side, they believe it was...

On paper, still needed to be signed, maybe some due diligence. But they felt it was, you know, 90 percent of the way there. Enough so that there was quite a detailed executive order circulating to at least one reporter at the Times as of Thursday morning that, you know, wasn't in play anymore on Friday. When we come back. Yeah, I guess you can keep making TikToks for now. This episode is brought to you by Discover.

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it might be a good place to find your zen. Discover top brands at unexpectedly low prices. Sierra, let's get moving. You alluded to this, but really the most valuable thing in any TikTok deal is the recommendation algorithm. It is the secret sauce that makes TikTok different from any other social media company. And it is under export controls from Beijing. So how...

Would the algorithm fit in this deal in any deal? Yeah, it's that part is really fuzzy because it seems as though

new TikTok entity was going to be able to license that technology. But the law is very specific that there can't be an operational relationship between the new TikTok entity and ByteDance in China, because this is where a lot of the lawmakers' concerns reside. Can this algorithm be manipulated by a foreign government that doesn't have America's interests at heart?

So it's unclear how they were going to go around that, but it seems like that was a part of the deal. And of course, that part of the deal would require China's sign-off. Well, this is what makes me ask,

how much or whether, if at all, the Chinese government was involved in these negotiations. Is this an arm's length thing where they had tacitly given their sign off or were they really not involved? So this part is really interesting. So ByteDance was actually serving as the go-between between the Chinese government and Washington's wishes.

So from what we have learned from our sources, Washington and Beijing were not talking directly. And I feel like this matters based on the broader context we're learning about in the tariff trade talks, too. Instead, ByteDance was representing what Washington wanted, trying to get sign-off support.

from China officials overseas. And ByteDance was communicating to the White House last week, you know, we're in a good place. China feels good about this deal. Things are going to be fine. It's kind of a crazy game of telephone. And a game of telephone is often ripe for misunderstanding. Exactly. And so that put ByteDance then in the position of having to tell the White House, you know, this deal is off. Right.

The deal was off because of the tariffs that President Trump announced. How quickly did things start to fall apart once the tariffs get rolled out? Extremely quickly. Like, it seemed as though it was within 24 hours, really, where...

China saw what was happening and said, you know, we're not okay with this anymore. I'm just struck by the fact that this thing was so close to happening, that the administration had worked so hard on this. And then for all intents and purposes, they torpedoed the deal. Where does that leave TikTok right now? I feel like I keep having these conversations with my husband who wanders into the kitchen at some point and says like, wait a minute,

Wasn't TikTok supposed to be banned or sold? What's happening here? Like, it's incredibly weird that this huge app with millions of Americans on it is just kind of humming along. Is it business as usual on TikTok?

It is largely business as usual. And I mean, the weird thing is, this is a company that's kind of gotten used to living in limbo. I mean, if you still work at that company, you have stuck with it through an actual temporary ban in the United States, a Supreme Court ruling, a law that specifically targeted you, two administrations that wanted to shut you down. And it just kind of keeps...

chugging along somehow. I mean, where that leaves TikTok now. So now they have this deadline to reach a deal in mid-June. I've talked to analysts, though, that point out, you know, who has the upper hand here? China, you could argue, has the upper hand because the U.S., a nation of laws, has passed a law that was, you know, passed with wide bipartisan support, upheld by the Supreme Court. And

And then, you know, has not been enforced by its executive branch, which keeps punting it along. And there doesn't seem to be an enforcement mechanism at this point.

So I think the company is optimistic that some sort of deal will be reached by June. I mean, the question is, what kind of world are we going to be living in for the next couple of months? And does TikTok end up becoming a chip in a much bigger deal? Theoretically, can the administration just keep punting this deal 75 days at a time? Like at some point, do they stop being able to do that? I think theoretically they can, but...

This does, I mean, it's difficult to get clear answers on this from a lot of the people I talk to because it's pretty unprecedented for a law like this to just go completely unenforced.

But of course, enforcing it has these really, really big consequences, not just for people's entertainment, but for people who now make a living on TikTok through TikTok shop and through regular creator stuff, just brand deals and views of just funny things, so on and so on. So it could just continue to get just not enforced.

It's unclear what kind of appetite there is in Congress for people to stand up to the Trump administration on something like this, you know, which may be politically unpopular given how much Americans do love TikTok.

And there's an open question around whether the technology companies that are supposed to enforce this law could be sued by shareholders. We saw one company, Akamai, actually add some language to their annual filings saying, you know, we may be opening ourselves to legal liability by believing the Trump administration on this. And who knows if this if we're really safe under this law. But, you know,

Again, it's really hard to see a mechanism for how the law gets enforced. In the many rounds of analysis that you and I have done on the TikTok question, one thing that was starting to happen was creators were moving to other apps because this was so uncertain. They were increasing their presence on YouTube or they were going on Red Note. I mean, there's all sorts of other stuff. Yeah.

What happens to the TikTok economy now? I mean, it really seems to have bounced back incredibly since January. And I've heard mixed things from creators. I think there's

still a persistent line of belief that this thing is safe. It's not going to go away. That was a fluke in January. But there's also creators and agents who look at what happened in January as proof that things can disappear in an instant. And maybe the future of this is precarious. But I mean, ultimately...

Despite how long this was telegraphed, despite the resources of a YouTube or an Instagram, the fact remains that there has not been an amazing alternative to TikTok. I mean, what it provides, the...

snappiness of the videos, the skill of the algorithm, just like the fact that the app enjoyed this kind of generational event of a pandemic that got so many people onto it and kind of unwilling to leave it. There just really hasn't been a great alternative to the app.

And it's pretty remarkable because, you know, once all this goes away, TikTok still has to deal with the same problems that any social platform does, which are, you know, retaining your users, fighting misinformation, teen mental health, and so on and so on. But it's had its hands full, obviously, with this much bigger, more existential question till now. Sapna Maheshwari, as always, it's a pleasure to talk to you. Thanks. Thanks.

Safna Maheshwari is a reporter for The New York Times who covers TikTok. And that is it for our show today. What Next TBD is produced by Evan Campbell and Patrick Ford. Our show is edited by Rob Gunther. Slate is run by Hilary Fry. And TBD is part of the larger What Next family. And if you're looking for more great Slate podcasts to listen to, subscribe to Slate+.

You get access to more TBD stories, including our bonus episode, The Discourse. There, you can hear about what happened after we launched our ridiculous meme coin and got rich, at least briefly, on paper. All right, we'll be back next week with more episodes. I'm Lizzie O'Leary. Thanks for listening.