U.S. and China Agree on TikTok Ownership Framework Ahead of High-Level Talks
The United States and China have reached a preliminary framework agreement regarding the ownership structure of TikTok’s U.S. operations, Treasury Secretary Scott Bessent announced Monday. The announcement came during bilateral trade discussions in Madrid.
“It’s between two private parties, but the commercial terms have been agreed upon,” Bessent said, signaling progress toward resolving ongoing concerns over the popular social media platform’s control.
Both President Donald Trump and Chinese President Xi Jinping are scheduled to confer this Friday to finalize the terms of the deal. Trump noted in a post on his social media platform Truth Social that the agreement pertains to “a ‘certain’ company that young people in our Country very much wanted to save,” referring to TikTok.
The deal’s framework suggests a potential shift toward U.S.-controlled ownership of TikTok’s American business, addressing national security concerns that have fueled regulatory scrutiny.
China’s chief trade negotiator, Li Chenggang, confirmed the existence of the framework and urged the U.S. to refrain from further suppressing Chinese companies, according to Reuters.
Context of U.S.-China Trade Relations and TikTok’s Regulatory Pressure
The announcement occurs against a backdrop of strained U.S.-China relations, marked by tariffs and trade restrictions initiated under the Trump administration. TikTok’s parent company, ByteDance, faces a looming September 17 deadline to divest its U.S. operations or risk being banned in the country.
U.S. Trade Representative Jamieson Greer indicated that while the divestiture deadline might be extended to accommodate finalizing the deal, such extensions will not be indefinite.
Congress passed legislation last year barring app stores like Apple and Google from distributing TikTok in the U.S., citing concerns over its status as a “foreign adversary-controlled application.” However, enforcement has been delayed multiple times through executive orders signed by Trump, granting ByteDance additional time to negotiate a resolution.
Commerce Secretary Howard Lutnick stated in July that TikTok would be forced to shut down in the U.S. if China does not grant the U.S. greater autonomy over the platform.
Potential Buyers and National Security Considerations
Trump has previously mentioned interest from affluent buyers to acquire TikTok’s U.S. business, including Oracle Chairman Larry Ellison and Tesla CEO Elon Musk, though no formal acquisition has been confirmed. Additionally, bids have reportedly come from AI startup Perplexity and Frank McCourt’s Project Liberty internet advocacy group.
While Trump has characterized TikTok as a national security threat, the White House launched an official TikTok account last August, illustrating the platform’s complex role in U.S. public life.
TikTok did not immediately respond to requests for comment on the framework deal.
FinOracleAI — Market View
The announcement of a framework agreement between the U.S. and China on TikTok’s ownership is likely to be viewed positively by markets, as it reduces regulatory uncertainty surrounding the platform’s U.S. operations. Resolution of this issue could stabilize TikTok’s business prospects and ease geopolitical tensions in the tech sector. However, risks remain, including potential delays in finalizing the deal and ongoing U.S.-China trade frictions. Investors should monitor the outcome of the Trump-Xi discussions on Friday and subsequent regulatory decisions closely.
Impact: positive
