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Photo illustration: Aïda Amer/Axios. Photo: Jim Watson/AFP via Getty Images

President Trump said twice Monday that the U.S. Treasury would need to get a portion of the sale price of TikTok, as a condition of regulatory approval.

Why it matters: This is akin to extortion — the sort of thing you'd expect to hear on a wiretap, not from the White House in front of reporters.

  • Trump has claimed that his threats to ban TikTok, and the furious M&A process it spawned, are based on national security concerns.
  • But, this is inconsistent with requiring payment for deal approval, even if such a thing were legal. Either a sale agreement satisfies national security criteria or it doesn't.

Between the lines: That's because Microsoft isn't the only party kicking TikTok's tires, as Trump also said. Multiple sources tell Axios that Apple has expressed interest, albeit no sources inside of Apple, and that at least one other strategic has expressed interest.

  • It would be an unusual deal for Apple, given that TikTok is a cross-platform app, and a bigger political headache than Tim Cook may want (both here and in China). But the company certainly has the cash on hand.
  • An Apple spokesperson told Axios there are no discussions about buying TikTok, and the company isn’t interested.

The big picture: It obviously behooves current TikTok owner ByteDance for there to be multiple suitors when it comes to pricing. Multiple suitors also could help the White House secure concessions.

  • Private equity is also circling, including some firms that don't have current stakes in ByteDance. But no sources have noted one that's terribly optimistic that they can pull it off without finding an insider or major strategic with whom to partner.

Flashback: It's reminiscent of how Huawei was used as a chip in U.S.-China trade negotiations, as if its perniciousness waxed and waned with the number of soybeans China agreed to buy.

  • The president's comments came shortly after an "Axios Re:Cap" interview with Peter Navarro, in which the White House's top trade adviser suggested that a buyer may have to offer different concessions, such as reducing non-TikTok business activities in China.

The state of play: There is no way ByteDance would pay a portion of sale proceeds to U.S. Treasury, if only because of the PR ramifications in China.

  • Even if ByteDance would allow TikTok's buyer to codify such a payment in its sale agreement, which is doubtful, it's (almost) inconceivable that any U.S. corporation would do so. It's an Action Park-level slippery slope.

The bottom line: There is no guarantee a deal will be struck by Trump's Sept. 15 deadline, let alone one on the terms he claims to require.

  • If not, he'll either have to ban a service beloved by tens of millions of voters, less than two months before the election, or kick the can down the road.

Go deeper

Ina Fried, author of Login
Updated Nov 10, 2020 - Technology

Apple debuts first Macs with homegrown processors

Illustration: Aïda Amer/Axios

Apple on Tuesday debuted the first Macs with chips the company designed in-house, introducing updated versions of the MacBook Air, MacBook Pro and Mac mini that use its new M1 processor.

Why it matters: The move away from Intel processors could reduce costs for Apple and give the company more flexibility in design, but also adds short-term uncertainty as well as extra work for developers.

Nov 10, 2020 - World

What China thinks of Biden

Vice President Joe Biden welcomes Chinese President Xi Jinping in Washington, D.C., Sept. 24, 2015. Photo: Xinhua/Huang Jingwen via Getty Images.

China's leaders see President-elect Joe Biden as a more predictable, but not necessarily less formidable, U.S. leader.

Why it matters: Relations aren't likely to be chummy, but Beijing is hoping diplomacy between the two superpowers can be restored.

Dion Rabouin, author of Markets
3 mins ago - Economy & Business

2021's expected earnings blowout begins

JPMorgan CEO Jamie Dimon. Photo: Mark Kauzlarich/Bloomberg via Getty Images

First-quarter earnings so far have been very strong, outpacing even the rosy expectations from Wall Street and that's a trend that's expected to continue for all of 2021. S&P 500 companies are on pace for one of the best quarters of positive earnings surprises on record, according to FactSet.

Why it matters: The results show that not only has the earnings recession ended for U.S. companies, but firms are performing better than expected and the economy may be justifying all the hype.