US and China agree TikTok ownership framework, ban averted for now
The United States and China have announced a preliminary agreement to transfer TikTok’s American operations into US-controlled ownership, potentially averting a ban just days before the September 17 deadline.
Treasury Secretary Scott Bessent confirmed the “framework” deal during trade talks in Madrid, adding that President Donald Trump and Chinese President Xi Jinping will finalise the agreement in a phone call scheduled for Friday. The proposed structure would move ownership of TikTok’s US operations away from Chinese parent company ByteDance to American investors, a move aimed at addressing long-standing national security concerns.
Bessent declined to reveal commercial details, describing it as “a deal between two private parties,” but stressed that the arrangement would protect US security interests while retaining TikTok’s cultural identity — a key demand from Chinese negotiators.
Trump hails breakthrough
Trump quickly celebrated the breakthrough on Truth Social, writing that “a deal was also reached on a ‘certain’ company that young people in our Country very much wanted to save.” The announcement followed months of fraught negotiations and three extensions since Trump entered office. Without a settlement, TikTok faced a ban from September 17.
Chinese trade negotiator Li Chenggang also confirmed the progress, describing it as a “basic framework consensus” to resolve disputes around the app through cooperation. At the same time, he cautioned Washington against continued “suppression” of Chinese firms even as Beijing agreed to accommodate certain American security concerns.
Algorithm control still in question
Despite the agreement, key issues remain unresolved. Central to the debate is whether ByteDance will surrender control of TikTok’s recommendation algorithm — the closely guarded technology that drives its massive user engagement. Beijing has previously resisted transferring the algorithm outright, considering it a strategically sensitive asset.
Wang Jingtao of China’s cyberspace regulator suggested the compromise could involve licensing intellectual property rather than a complete transfer. Any final settlement may also need congressional approval. A 2024 law, upheld by the Supreme Court, requires ByteDance to divest TikTok or face a ban, prohibiting “foreign adversary” nations from owning more than 20 per cent of the platform.
Oracle expected to play central role
Industry observers expect Oracle co-founder Larry Ellison — a Trump ally whose company already hosts TikTok’s American data — to spearhead the group of US investors. TikTok currently serves around 170 million American users, making the resolution one of the most consequential technology deals in recent years.
The framework deal signals progress but leaves open questions about governance, technology transfer, and long-term oversight. Final confirmation of the agreement will hinge on Friday’s Trump–Xi call and subsequent approval from Washington lawmakers.
