TikTok. Photo: VCG

US President Donald Trump on Monday appeared to be reneging on a deal between TikTok's Chinese parent company ByteDance and US firms Oracle and Walmart two days after approving it "in concept," setting up a direct showdown with the Chinese government, which is also set to step in to protect Chinese technology and interests in accordance with a recent regulatory change. 

In an interview with Fox News, Trump said that if Oracle and Walmart "find they don't have total control, then we're not going to approve the deal." He even suggested that ByteDance would have to completely lose the app, or "we just won't make the deal." 

Trump's remarks on Monday, which came two days after he said on Saturday afternoon that he had "approved the deal in concept," once again threw the emerging restructuring plan and along with it TikTok's fate in the US into doubt.

However, Trump's new threats will unlikely go unchecked in China, where ByteDance has insisted that it would retain a controlling stake in the new subsidy in partnership with Oracle and Walmart, and Chinese officials made it clear that no deal will be completed without their approval.

In a lengthy statement on Monday, ByteDance pushed back against four rumors regarding the plan. The firm said that TikTok Global, though with its headquarters in the US, is a wholly-owned subsidiary, in which it will retain an 80 percent stake after a pre-IPO financing round. 

ByteDance also made it clear that the deal would not involve the transfer of any algorithms and technology, though Oracle would have access to TikTok's source code for US users. It said that reports of TikTok Global paying the US Treasury $5billion is actually an estimate for corporate taxes in the years to come. It said it only heard for the first time in media reports that TikTok Global would set up a $5 billion education fund in the US. 

While Chinese officials have not issued a decision on the proposed plan, they will unlikely allow any deal that would require the Chinese firm to lose its ownership of TikTok and give up its algorithms, the artificial intelligence powered content recommendation system behind the app's success, to US companies, experts noted.

After Trump issued an executive order in attempt to force the sale of TikTok to US businesses, China at end of last month moved to revise its regulations on banned and restricted technologies to include algorithms, a move that has been widely viewed as a shield against the US robbery of TikTok and its technologies.  

The battle over TikTok will continue in the coming weeks, Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance, told the Global Times on Monday.

On the one side, Trump would project himself as a strongman to fight for more benefits for US businesses at the cost of humiliating the Chinese side, Xiang said, noting that China, on the other side, is unlikely to succumb to his will.

Whatever the eventual deal might look like, if there is one, it needs to gain the approval of China's commerce ministry, he went on to say.  

The worse-case scenario would be a no-win situation with Trump's reckless moves slamming businesses across the Pacific, Liu Dingding, an independent internet analyst in Beijing, told the Global Times on Monday. 

Global Times