The U.S. government will collect a multibillion-dollar fee from the American investors who will take over TikTok. Some experts call the fee and other deals like it « extortion. »
The Trump administration recently approached a coalition of U.S. investors set to take over TikTok’s U.S. operations with an ask: Will the group make a payment to the federal government « in the low billions », according to a person with direct knowledge of the talks.
The response from the investors, which includes tech mogul Larry Ellison, the Murdochs and venture capital heavyweight Andreessen Horowitz, was an unequivocal yes.
« Not a single member balked », said the person, who was not authorized to speak publicly. « They see it as something of a finders’ fee. »
Welcome to President Trump’s new business agenda: Extracting payments as if the federal government is brokering deals like a white-shoe consulting firm fueled by lucrative « fees for service. »
Whether it’s the U.S. taking 15% of Nvidia and AMD’s chip sales to China, the federal government securing a « golden share » in U.S. Steel or the Trump administration reportedly seeking an equity stake in Lithium Americas as part of a government loan negotiation, the White House is on a campaign of squeezing businesses with few parallels in modern history.
« At a minimum, this now means there is a tax imposed on every major business transaction », said Luigi Zingales, a professor of finance at the University of Chicago. « But even worse, businesses will no longer be focused on innovating and creating value and instead the whole game now is rent-seeking. It’s all about ingratiating yourself with Trump. »
The White House did not return a request for comment.
Asked on Thursday about the multibillion-dollar fee expected to be tacked onto the TikTok deal, which was earlier reported by The Wall Street Journal, Trump was evasive.
« We’re going to be announcing different things, but the U.S. comes out great », Trump said from the Oval Office.
Trump has been more direct about defending his administration’s private business interventions, including after Intel agreed to sell a 10% stake of the company to the U.S. government following Trump’s calls for its chief executive to resign.
« The United States paid nothing for these Shares, and the Shares are now valued at approximately $11 Billion Dollars. This is a great Deal for America and, also, a great Deal for INTEL », Trump posted last month.Many media companies capitulate to Trump pressure
This pattern has played out across media, where Trump’s longtime war against news organizations has escalated into marshaling the might of the federal government to force concessions.
The parent companies for ABC and CBS both settled lawsuits for $16 million following Trump lawsuits alleging mistreatment by the networks. The payments went to Trump’s presidential library foundation and Trump’s legal fees. Shortly after CBS’s payment, federal regulators approved the sale of its parent company, Paramount, to Skydance Media, which is controlled by the Ellison family.
Media companies were already signaling their acquiescence to Trump before he won a second term.
