US and China strike deal to keep TikTok running in America
Negotiations over TikTok’s future were previously derailed in the spring, after Beijing balked at Trump’s decision to impose tariffs on Chinese goods.
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President Donald Trump on Tuesday announced that Washington and Beijing had reached an agreement to allow TikTok to continue operating in the United States, marking a breakthrough in a saga that has stretched for nearly a year. Three sources familiar with the matter said the terms closely resembled those discussed earlier this year.
The agreement reportedly requires TikTok’s American assets to be transferred from Chinese parent company ByteDance to U.S. ownership. The deal, covering the short video app’s 170 million American users, comes after months of negotiations between the world’s two largest economies, aimed at easing a trade conflict that has shaken global markets.
Trump told reporters at the White House that they have a deal on TikTok, and a group of very big companies that want to buy it, though he declined to share specifics. The announcement came just one day before a 17 September deadline for TikTok to sell or shut down its U.S. operations. Hours later, the White House extended the deadline until 16 December, giving ByteDance an additional 90 days to finalise the complex transfer.
According to the Wall Street Journal, the restructured U.S. entity will have an American-dominated board, with one seat appointed by the U.S. government. The model mirrors a recent national security arrangement that permitted Nippon Steel to acquire U.S. Steel, provided Washington retained a “golden share” and a board presence.
Any agreement is likely to require approval from the Republican-controlled Congress, which in 2024 under the Biden administration passed a law mandating TikTok’s divestiture. Lawmakers cited concerns that the Chinese state could gain access to American user data or exploit the app for influence campaigns.
Two sources indicated that ByteDance would retain a 19.9% stake in the new entity—just under the legal threshold of 20%. However, the final shape of the deal remains uncertain, with room for last-minute revisions, as reported by Wall Street Journal.
U.S. Treasury Secretary Scott Bessent told CNBC that the commercial terms had effectively been settled since March, with only a handful of details left to iron out. “This deal wouldn’t be done without proper safeguards for U.S. national security,” Bessent said. “It seems as though we were also able to meet the Chinese interest.” CNBC also reported the deal could close within 30 to 45 days, involving both ByteDance’s current American backers and new investors.
The arrangement echoes earlier Reuters reporting that TikTok’s U.S. operations would be spun off into a standalone company headquartered in the United States and majority-owned by U.S. investors. ByteDance’s existing American backers include Jeff Yass’ Susquehanna International Group, General Atlantic, Kohlberg Kravis Roberts, and Sequoia Capital.
Despite congressional pressure, the Trump administration has repeatedly extended the divestiture deadline, wary of alienating TikTok’s massive user base and disrupting political communication channels. Trump himself has credited the platform with boosting his re-election campaign and counts more than 15 million followers on his personal account. The White House even launched its own official TikTok channel last month.
Tariffs and TikTok
Negotiations over TikTok’s future were previously derailed in the spring, after Beijing balked at Trump’s decision to impose tariffs on Chinese goods. Washington has long argued that ByteDance’s ownership ties the app too closely to the Chinese state. TikTok, however, has insisted that its U.S. operations are insulated, pointing to American-based content moderation and its reliance on Oracle’s cloud servers to host U.S. data.
CNBC reported on Tuesday that Oracle would continue to provide cloud services under the new deal. Earlier this year, Reuters reported that the White House had been exploring a plan under which Oracle and a consortium of outside investors would oversee TikTok’s operations and address national security concerns. Oracle shares rose on the news before paring some gains, closing 1% higher.
Officials from both countries reached a framework agreement on Monday. A final confirmation is expected on Friday during a call between Trump and Chinese President Xi Jinping. Trump previously revealed that his administration had been in talks with four separate groups about TikTok’s sale, with Microsoft, Amazon, billionaire Frank McCourt, and a consortium led by the founder of OnlyFans all linked to bids.
