What’s the Deal
President Donald Trump has announced that the U.S. has reached a framework agreement with China that will allow TikTok to continue operating in the United States—despite laws mandating its divestment or ban. The deal, still subject to final details and confirmation, involves transferring control of TikTok’s U.S. operations to a group of American companies.
Key Terms & Players
- The U.S. operations of TikTok will be placed under U.S.-controlled ownership, with Chinese parent ByteDance retaining a reduced stake—reportedly around 19.9% in the new structure.
- Companies such as Oracle, Silver Lake, and Andreessen Horowitz are expected to be among those acquiring or controlling the majority of the U.S. entity.
- A core remaining concern is the app’s algorithm—developed by ByteDance in China. Under the proposed deal, some license or continued involvement by ByteDance may persist in that respect, though oversight, data control, and governance are expected to shift toward U.S. hands.
Legal & Political Background
- This follows the PAFACA (Protecting Americans from Foreign Adversary Controlled Applications Act), a U.S. law passed in 2024 that requires apps like TikTok, owned by companies tied to foreign adversaries, to divest or face a ban.
- Trump has repeatedly extended enforcement deadlines for divestment, giving ByteDance and negotiators more time to meet the law’s requirements.
Implications & Remaining Questions
- If finalized, the deal would avoid a TikTok ban in the U.S., preserving access for its millions of American users.
- U.S. national security concerns—especially around data sovereignty, user privacy, content moderation, and algorithmic transparency—remain central to opposition and scrutiny.
- The deal still needs to be ratified and confirmed. Trump indicated he will speak with Chinese President Xi Jinping to finalize the agreement.
