(Reuters) - A deal to spin off the U.S. assets of TikTok was put on hold after China indicated that it would not approve the deal following President Donald Trump's reciprocal tariffs announcement, according to two sources familiar with the matter.

The deal, the structure of which was largely finalized by Wednesday, according to one of the sources, would have spun off TikTok's U.S. operations into a new company based in America and owned and operated by a majority of U.S. investors. ByteDance would hold a minority position of under 20%.

The deal was approved by existing investors, new investors, ByteDance and the U.S. government, the source said.

ByteDance and the White House did not immediately respond to a request for comment. The Chinese Embassy in Washington D.C. also did not immediately reply to request for comment.