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CNN
an hour ago
- CNN
China sidesteps question on TikTok after Trump says close to deal
China's government on Monday sidestepped a question on US President Donald Trump's recent claim that he 'pretty much' has a deal with Beijing to bring TikTok into American ownership and that talks with China over the popular short-video app could begin early this week. TikTok's Chinese parent company ByteDance is under pressure to spin off the short-video app's US operations by September 17 or face a ban in the United States. Last year, then President Joe Biden signed a sale-or-ban law, requiring ByteDance to divest the app to an American owner over national security concerns. Despite an original January deadline, Trump has repeatedly delayed enforcement of the law. 'China has reiterated its principle and position on issues related to TikTok on multiple occasions,' China's Foreign Ministry spokesperson Mao Ning said on Monday in response to a request for an update on the latest TikTok talks, without providing further details. When previously asked about the TikTok deal, the Foreign Ministry has urged the US to provide an 'open, fair, just and non-discriminatory business environment' for Chinese businesses, and said that acquisition of businesses should be 'independently decided by companies in accordance with market principles.' The Chinese government has given little indication that it would approve a forced sale. In early 2023, a Commerce Ministry spokeswoman said in the government's first direct response to the matter that China would oppose any forced sale of TikTok, citing how a sale or divestiture of the app would involve 'exporting technology' and had to be approved by the Chinese government. TikTok's 'algorithm' is widely seen as the app's secret sauce behind its explosive popularity. In the US, TikTok boasts over 170 million monthly active users, according to the company early last year. Over 60% of American teens and about a third of American adults use the social media platform, according to a Pew Research Center study, for news, entertainment, or even to earn a living. On Friday, Trump told reporters aboard Air Force One that the US 'pretty much' has a deal on the sale of the app, though he said he's 'not confident' China would approve the deal. 'I think we're going to start Monday or Tuesday…talking to China perhaps President Xi or one of his representatives, but we pretty much have a deal on TikTok,' he said, referring to Chinese leader Xi Jinping. He added the deal would 'probably' have to be approved by China. CNN has reached out to ByteDance and TikTok for comment. In late June, Trump said that there was a buyer for TikTok, teasing an announcement in two weeks. 'It's a group of very wealthy people,' he said on a Fox News program then, without providing more details. A deal that would transfer control of the app's US operations to American ownership had been on the horizon. But Trump's announcements of 'reciprocal' tariffs that brought levies on Chinese imports to the US to 54% on April 2 prompted China to pull out of the deal, CNN reported earlier. Based on the law, ByteDance can own no more than 20% of the platform in the final deal, and the app's US operations cannot coordinate with ByteDance on the app's algorithm or data-sharing practices. Alex Capri, a lecturer at the Business School of the National University of Singapore, told CNN that he doubts Beijing would approve the sale. 'Even if Beijing would choose to overlook the recent tariff hikes and ratcheting up of US export controls on Chip technologies, they still wouldn't grant export licenses for the algorithms,' he said. On Sunday, American tech media The Information reported that TikTok is building a new version of its app for US users to be launched ahead of the September deadline. Users will need to download the new app to continue using its platform while the existing app will shut down by March next year, it said. CNN's Fred He, Aleena Fayaz contributed reporting.
CNN
an hour ago
- CNN
China sidesteps question on TikTok after Trump says close to deal
China's government on Monday sidestepped a question on US President Donald Trump's recent claim that he 'pretty much' has a deal with Beijing to bring TikTok into American ownership and that talks with China over the popular short-video app could begin early this week. TikTok's Chinese parent company ByteDance is under pressure to spin off the short-video app's US operations by September 17 or face a ban in the United States. Last year, then President Joe Biden signed a sale-or-ban law, requiring ByteDance to divest the app to an American owner over national security concerns. Despite an original January deadline, Trump has repeatedly delayed enforcement of the law. 'China has reiterated its principle and position on issues related to TikTok on multiple occasions,' China's Foreign Ministry spokesperson Mao Ning said on Monday in response to a request for an update on the latest TikTok talks, without providing further details. When previously asked about the TikTok deal, the Foreign Ministry has urged the US to provide an 'open, fair, just and non-discriminatory business environment' for Chinese businesses, and said that acquisition of businesses should be 'independently decided by companies in accordance with market principles.' The Chinese government has given little indication that it would approve a forced sale. In early 2023, a Commerce Ministry spokeswoman said in the government's first direct response to the matter that China would oppose any forced sale of TikTok, citing how a sale or divestiture of the app would involve 'exporting technology' and had to be approved by the Chinese government. TikTok's 'algorithm' is widely seen as the app's secret sauce behind its explosive popularity. In the US, TikTok boasts over 170 million monthly active users, according to the company early last year. Over 60% of American teens and about a third of American adults use the social media platform, according to a Pew Research Center study, for news, entertainment, or even to earn a living. On Friday, Trump told reporters aboard Air Force One that the US 'pretty much' has a deal on the sale of the app, though he said he's 'not confident' China would approve the deal. 'I think we're going to start Monday or Tuesday…talking to China perhaps President Xi or one of his representatives, but we pretty much have a deal on TikTok,' he said, referring to Chinese leader Xi Jinping. He added the deal would 'probably' have to be approved by China. CNN has reached out to ByteDance and TikTok for comment. In late June, Trump said that there was a buyer for TikTok, teasing an announcement in two weeks. 'It's a group of very wealthy people,' he said on a Fox News program then, without providing more details. A deal that would transfer control of the app's US operations to American ownership had been on the horizon. But Trump's announcements of 'reciprocal' tariffs that brought levies on Chinese imports to the US to 54% on April 2 prompted China to pull out of the deal, CNN reported earlier. Based on the law, ByteDance can own no more than 20% of the platform in the final deal, and the app's US operations cannot coordinate with ByteDance on the app's algorithm or data-sharing practices. Alex Capri, a lecturer at the Business School of the National University of Singapore, told CNN that he doubts Beijing would approve the sale. 'Even if Beijing would choose to overlook the recent tariff hikes and ratcheting up of US export controls on Chip technologies, they still wouldn't grant export licenses for the algorithms,' he said. On Sunday, American tech media The Information reported that TikTok is building a new version of its app for US users to be launched ahead of the September deadline. Users will need to download the new app to continue using its platform while the existing app will shut down by March next year, it said. CNN's Fred He, Aleena Fayaz contributed reporting.
Yahoo
an hour ago
- Yahoo
Analysis-China's rare earth export controls are good for Beijing, bad for business
(Reuters) -China's export restrictions on rare earths brought parts of the global auto supply chain to a halt and U.S. President Donald Trump to the negotiating table. But at home, they're a big headache for companies already struggling with a slow economy. Beijing curbed rare earth and magnet exports in April in retaliation against U.S. tariffs, driving down magnet makers' offshore sales at the same time as they face pressure from a weak economy and tough times in one of their key markets - EVs. The pain for magnet makers is unlikely to ease soon, even after the U.S. announced a deal with China on June 27 to get rare earths flowing again. Any agreement would take time to implement, said Baotou Rare Earth Products Exchange, a state-backed trading platform, noting that inventory was piling up in warehouses, in a post on WeChat 12 hours after the deal was announced. The export curbs led to a 75% drop in magnet exports in the two months after the restrictions were imposed and forced several global auto makers to pause some production. The restrictions caused a "crisis" for some local magnet makers, the Baotou exchange, based in Inner Mongolia, one of China's rare earths hubs, said in May. While China produces 90% of the rare earth magnets used worldwide and consumes most of them, exports ranged from 18% to 50% of total revenue in 2024 among the 11 largest publicly listed magnet producers by capacity, public filings show. "Their sales are now being squeezed from both ends – disrupted exports and flagging domestic demand," said Ellie Saklatvala, head of metal pricing at commodities information provider Argus. "They have temporarily lost an important part of their customer base, with no certainty about when they will regain it." Rare earths are politically sensitive in China and few major listed rare earth companies have commented directly about how the controls will affect their business. However, two rare earth magnet producers told Reuters revenue is expected to fall this year, speaking on condition of anonymity given the issue's sensitivity. "It will have a huge impact on the export business, although it's hard to tell exactly how much of a loss we will suffer for now," said one of the rare earth magnet producers, requesting anonymity due to the sensitivity of the matter. Small- and medium-sized producers cut production by around 15% in April and May, according to another source with knowledge of the matter, who also declined to be named. EXPORT CURBS' IMPACT UNDERESTIMATED Much like U.S. chipmaker Nvidia, China's rare earth magnet makers are victims of their own importance. Caught in the geopolitical crossfire of Washington's tariffs and China's retaliation, share prices of the listed magnet makers slumped in April after the export curbs were announced. However, they have climbed off their lows over the past three months. The rebound does not appear to be based on any reasonable forecast of the industry's future, said Cory Combs, head of critical mineral research at consultancy Trivium China. "I can see various market outlooks, more or less negative depending on the assumptions, but none of them yield a sustainable rise in share price like we're seeing," he said. Many magnet makers are also private, so share prices only tell a limited story, he said. Many producers already faced weaker conditions at home, including a price war among electric vehicle makers, a key customer segment, that has seen manufacturers demand discounts from suppliers. In addition, the highly customised nature of many magnet products makes it hard to resell cargoes domestically, forcing magnet makers to store them during the wait for licenses, four sources said, also speaking anonymously. CHALLENGES MAY SPUR CONSOLIDATION Listed magnet maker Baotou Tianhe Magnetics Technology Co noted the export curbs in its annual report released in late April, and said its export revenue could decline if the international situation deteriorated. Yantai Zhenghai Magnetics said last week it had received export licenses and production was normal. It referred investors to its upcoming financial filings for specific operating results. However, a quick return to the previous status quo is unlikely if the rare earth controls are implemented in a manner similar to those on other critical minerals including germanium and antimony, according to Argus' Saklatvala. China imposed export controls on germanium and antimony over the course of 2023 and 2024. Despite being used mostly by civilian industries, which in theory should face few issues getting licenses, exports have still not recovered fully, customs data shows. Europe is receiving only a tiny fraction of the antimony it imported from China before export controls were imposed last September. The shortages are already causing major problems for lead-acid battery makers, commonly found in gasoline engines. "Looking at China's recent export controls on other critical minerals – such as antimony – it is clear that it can sometimes take longer than expected for exports to resume and normalise," Saklatvala added. The large amounts of information required by export license authorities are a permanent change for the industry that will add delays and costs for producers, said David Abraham, affiliate professor at Boise State University, in Idaho. "In some sense, there's no going back," he said. In an industry that has hundreds of manufacturers, the pressures could lead to consolidation, he said. "I do not know if Beijing sees that as a bad thing, because further consolidation is helpful for controlling and understanding where materials go." (Reported by Reuters staff; Editing by Lewis Jackson and Sonali Paul)
