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Trump administration mulls TikTok divestiture extension

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TikTok preparing to shut US operations amid federal ban

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Supreme Court says it may issue rulings on Friday

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Senator Schumer says TikTok should get time to find buyer

(Adds new White House comment in paragraphs 6-7)

By David Shepardson

WASHINGTON, Jan 16 (Reuters) - TikTok's fortunes took a

positive turn on Thursday as a growing number of U.S. officials

said its Chinese owner should have more time to sell the app and

stop it from being banned ahead of President-elect Donald

Trump's return to the White House.

Trump's incoming national security adviser said the new

Republican administration will keep the social media app used by

170 million Americans alive in the U.S. if there is a viable

deal and top Senate Democrat Chuck Schumer urged President Joe

Biden to extend by 90 days a deadline to shut it down on Sunday.

A law passed in April mandates TikTok's owner, ByteDance,

divest TikTok's U.S. assets by Sunday to a non-Chinese buyer, or

be banned on national security concerns.

"We will put measures in place to keep TikTok from going

dark," U.S. Representative Mike Waltz told Fox News, pointing to

a provision in the law allowing for a 90-day extension if there

is "significant progress" toward a divestiture.

"Essentially that buys President Trump time to keep TikTok

going," said Waltz, who was picked by Trump to be his national

security adviser.

A White House official said on Thursday the Biden

administration does not plan to enforce the ban on Sunday

leaving it up to the Trump administration, though it is not

clear if the app will remain online absent a formal extension.

"Given the timing of when it goes into effect over a holiday

weekend a day before inauguration, it will be up to the next

administration to implement," the official said.

The U.S. Supreme Court is currently deciding whether to

uphold the law and allow TikTok to be banned on Sunday absent a

divestiture, overturn the law or pause it to give the justices

more time to make a decision.

The court said it may issue rulings on Friday, but as is

customary, did not state which case or cases would be decided.

Trump once supported a ban on the app but changed his stance

last year. His shift came amid growing signs of support for his

presidential campaign among tech executives and overtures from

Republican donor Jeff Yass, who owns a big share of ByteDance.

In a sign of warming ties between Trump and TikTok, the

video app's CEO, Shou Zi Chew, will attend the presidential

inauguration on Jan. 20 and be seated on the dais among other

high-profile invitees, two people familiar with the matter told

Reuters.

BIPARTISAN SHIFT

"It's clear that more time is needed to find an American

buyer and not disrupt the lives and livelihoods of millions of

Americans," Schumer said on the Senate floor, adding that

Democrats tried to pass a bill extending the deadline to find a

solution to 270 days.

"I will work with the Trump administration and with both

parties to keep TikTok alive while protecting our national

security," he added.

The comments by Schumer, who was a strong supporter of the

law to force a sale, are a sign of the growing concern among

prominent Democrats about the potential impact and political

fallout of shutting down TikTok.

The New York Times reported Trump is considering an

executive order that would seek to allow TikTok to continue

operating despite a pending legal ban until new owners are

found. It was not immediately clear if Trump has the authority

to do so given the legal divestiture requirements imposed by

Congress.

TikTok did not respond to requests for comment.

A spokeswoman for the Trump transition, Karoline Leavitt,

said, "President Trump has repeatedly expressed his desire to

save TikTok, and there's no better deal maker than Donald

Trump."

'TALKS A BIG GAME'

Still, several Republicans and Democrats remain concerned

about Chinese ownership of the app, worried the Chinese

government could use it as a tool to collect data on U.S.

citizens and to spread propaganda to the public.

"Trump talks a big game on China & wanted to ban TikTok -

just like many Republicans voted to do," Representative Frank

Pallone, the top Democrat on the Energy and Commerce Committee,

wrote on the social media platform X.

"But now he's inviting TikTok's CEO to sit beside him at his

inauguration even though TikTok is linked to the CCP & is a

threat to our national security. What message does this send?"

The prospect of a TikTok ban has already triggered some

users to seek alternatives, with Chinese social media app

RedNote gaining nearly 3 million U.S. users in one day earlier

this week, according to analytics firm Similarweb.

Reuters reported that TikTok plans to shut U.S. operations

of its social media app on Sunday barring a last-minute

reprieve, according to people familiar with the matter.

Privately held ByteDance is about 60% owned by institutional

investors such as BlackRock ( BLK ) and General Atlantic, while

its founders and employees own 20% each. It has more than 7,000

employees in the United States.