US and China Agree on TikTok Deal Framework Amid Ongoing Trade Tensions
The United States and China have reached a preliminary “framework” agreement concerning the ownership structure of TikTok’s U.S. business, Treasury Secretary Scott Bessent announced Monday during trade discussions in Madrid.
Bessent stated that while the deal involves two private parties, the commercial terms have been agreed upon. The finalization of the agreement is expected after a meeting between U.S. President Donald Trump and Chinese President Xi Jinping scheduled for Friday.
President Trump confirmed the development via a Truth Social post, referring to the deal as involving “a ‘certain’ company that young people in our Country very much wanted to save.” Bessent suggested the framework could lead to TikTok shifting toward U.S.-controlled ownership, addressing longstanding national security concerns.
China’s lead trade negotiator, Li Chenggang, corroborated the existence of the framework agreement and called on the U.S. to halt efforts to suppress Chinese companies, remarks reported by Reuters. These comments come amid strained U.S.-China relations marked by tariffs and trade restrictions implemented in recent months.
Impending Divestiture Deadline and Regulatory Pressure
TikTok’s parent company, ByteDance, is under pressure to divest its U.S. operations by September 17 or risk a shutdown of the platform in the United States. U.S. Trade Representative Jamieson Greer indicated that the deadline might be extended slightly to allow for the deal’s completion but emphasized that no indefinite extensions would be granted.
Congress passed legislation last year prohibiting app store operators such as Apple and Google from distributing TikTok in the U.S., citing concerns that it is controlled by a “foreign adversary.” Despite this, President Trump delayed the app’s shutdown multiple times through executive orders to provide ByteDance additional time to negotiate a sale or restructuring.
Commerce Secretary Howard Lutnick warned in July that TikTok would be banned for American users if China does not grant the U.S. more control over the app’s operations.
Potential Buyers and National Security Debate
President Trump has previously indicated interest from a group of wealthy investors ready to acquire TikTok’s U.S. business, though details remain undisclosed. He has mentioned Oracle Chairman Larry Ellison and Tesla CEO Elon Musk as potential buyers. Other bids reportedly include AI startup Perplexity and businessman Frank McCourt’s Project Liberty.
While Trump has characterized TikTok as a national security threat, the White House launched an official TikTok account in August, highlighting the complex position the platform holds in U.S. policy and public engagement.
FinOracleAI — Market View
The announcement of a framework agreement between the U.S. and China on TikTok’s ownership reduces immediate regulatory uncertainty surrounding the platform’s operations in the U.S. This development is likely to be viewed positively by investors anticipating resolution to the ongoing dispute. However, risks remain if final negotiations between Presidents Trump and Xi fail to produce a conclusive deal or if regulatory hurdles persist.
Market participants should monitor the outcome of the scheduled Trump-Xi meeting and any subsequent regulatory actions, as these will determine TikTok’s operational future and broader U.S.-China technology relations.
Impact: positive
