Reversing course, President Trump directed the U.S. Commerce Secretary to delay for a week a ban on TikTok downloads that was due to take effect Sunday.
The delay apparently gives TikTok owner ByteDance, Oracle and Walmart more time to work out the final details of a new TikTok Global business headquartered in the U.S. with 25,000 jobs created nationwide and $5 billion in new tax dollars paid to the U.S. Treasury. Oracle and Walmart would own 20% of the business.
Secretary Wilbur Ross said in a statement issued late Saturday that the president directed the delay of the ban “in light of recent positive developments.” The delay doesn’t reverse a ban on WeChat downloads in the U.S. effective Sunday, Sept. 20, but a federal judge in California has issued a temporary injunction to suspend that ban. WeChat, a social networking app, is also owned by ByteDance and is popular in China with more than 1.2 billion users that use the app to transfer funds and hold group chats.
The delay for the TikTok ban came after Trump told reporters on Saturday that he had granted his “blessing” to a new tentative deal between U.S. Tech company Oracle and TikTok. Oracle announced Saturday it would be a minority investor in TikTok’s global business, with a 12.5% stake, and also serve as the app’s secure cloud provider.
TikTok separately confirmed Saturday that both Oracle and Walmart would take part in a TikTok Global pre-IPO financing round, and could take up to a 20% cumulative stake in the global company, effectively giving Walmart 7.5%. In addition, TikTok said it would set up a U.S.-based headquarters and bring 25,000 jobs across the U.S. Oracle said TikTok Global would pay more than $5 billion in new tax dollars to the U.S. Treasury. TikTok also has private equity shareholders based in the U.S. who make up 40% of the ownership, according to reports, something that Trump officials believe helps make TikTok Global a U.S. company because of the added share from Walmart and Oracle.
On Friday, the U.S. had announced the ban on downloads of TikTok and WeChat in the U.S. citing national security and personal privacy concerns with the apps. Trump originally wanted the app shut down unless it was sold entirely to a U.S. company. The Trump Administration has steadily been stepping up economic and trade sanctions with China since 2017 primarily over concerns that the Chinese Communist Party has the ability to hack or monitor communications and data on Chinese-made electronics.
TikTok and its parent company, ByteDance, later Friday filed a complaint with a federal court in Washington seeking to block the Trump Administration from enforcing the ban. TikTok and ByteDance said the ban was introduced for political reasons and would violate the company’s First Amendment rights. The TikTok video sharing app has about 100 million users in the U.S.