‍👉 Background: TikTok is the Chinese-owned social media platform that has taken the world by storm since it launched globally back in 2017. It  has grown to nearly 136 million monthly active users in the US... and a lazy 8.5 million monthly active users in Australia too.

• Last year, the US government passed a law that banned TikTok if it wasn’t sold to a US company by early January this year.
• On January 18th this, TikTok went offline in the US for 1 day after it hadn't been sold to a US company by the deadline
• When Donald Trump came into office, he gave TikTok 75 days to find a new US owner

👉 What happened: Since then, there has been a swarm of tech companies and investors wanting to get their algorithmic-hands on TikTok - we're talking Oracle, Microsoft and even Amazon. But it ain't just tech companies - investors like Blackstone and Andreessen Horowitz have also reportedly submitted a proposal to acquire TikTok.

👉 What else: Without a new owner by early April, TikTok should technically be shut down in the US. But now, Trump has signed a new Executive Order giving TikTok another 75 days to finalise a deal. And, this all comes days after Trump announced 54% tariffs on China…and then another 50% tariff to be added over the coming days. But Trump has said that if TikTok sells to a US buyer, he may consider reducing the tariffs.

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‍What's the key learning?

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‍💡Tariffs aren’t just a trade tool, they’re a bargaining chip in economic negotiations. Trump’s 104% tariff on Chinese goods will cause enormous pain for US companies, Chinese companies and consumers too.

💡This shows how tariffs have been used to achieve unrelated outcomes. Trump is essentially saying: “Let this TikTok deal happen, or your exports pay the price.”.

💡The downside is that this “dealmaking” creates market volatility and puts pressure on domestic industries. It also invites retaliation with China whacking a 34% tariff rate on US imported goods and threatening to shut down Hollywood movies in China.