On Thursday, U.S. Commerce Secretary Howard Lutnick said that TikTok will be banned unless China allows American ownership and control of the platform's algorithm and technology.
What Happened: Speaking on CNBC's Squawk on the Street, Lutnick reinforced the Donald Trump administration's position that TikTok must be divested from Chinese parent, ByteDance, to remain operational in the U.S.
"It's got to come out of Chinese control," Lutnick said. "You can't have Chinese control and have something on 100 million American phones. That's just not okay."
He confirmed that the administration supports a deal that would give Americans control of TikTok's technology and algorithm, allowing ByteDance to retain only a minor stake.
"If that deal gets approved by the Chinese, then that deal will happen. If they don't approve it, then TikTok is going to go dark and those decisions are coming very soon."
Luntnick added that while TikTok isn't officially part of ongoing U.S.-China trade talks, it remains a high-priority topic: "You can't really go meet somebody and not bring up the topics that are relevant."
Why It's Important: TikTok's fate hangs in the balance as geopolitical tensions rise. The platform boasts more than 150 million users in the U.S.
Last week, it was reported that the Chinese social media giant posted $43 billion in revenue in the first quarter of this year and has recently surpassed Meta Platforms, Inc. (NASDAQ:META) in quarterly earnings.
A U.S. law passed in 2024 requires ByteDance to divest TikTok or face a nationwide ban.
With private equity giant Blackstone Inc. (NYSE:BX) already pulling out of a U.S.-led acquisition group, the spotlight now falls on Beijing's response.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
