US and China Reach Framework Deal to Divest TikTok from Chinese Parent Company
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Emma Roth, a journalist covering streaming wars, consumer tech, crypto, and social media, reports that the US and China have reached a preliminary “framework” agreement to divest TikTok from its Chinese parent company, ByteDance.
According to Treasury Secretary Scott Bessent, speaking during trade talks in Madrid, the deal involves transitioning TikTok to U.S.-controlled ownership. Bessent confirmed that “the framework is for a switch to a U.S.-controlled ownership” and indicated that President Trump would formalize the deal with Chinese President Xi Jinping on Friday, just two days after the latest deadline set for the app’s sale or ban.
Background and Negotiations ---------------------------
The negotiations have been tense over recent months. TikTok faced a potential ban in January, but Trump granted extensions to allow the company more time to negotiate a sale of its U.S. operations, required by the Protecting Americans from Foreign Adversary Controlled Applications Act. Trump provided additional extensions, with a final deadline of September 17th. It remains uncertain whether Trump will officially extend this deadline or consider the current announcement enough to count as compliance. Furthermore, it is unclear whether the proposed deal will meet all legal requirements.
Bessent noted that the US and China are “very close” to an agreement but mentioned that China had some “very aggressive asks,” as reported by The New York Times. While negotiations earlier this year also nearly concluded, they fell through amid ongoing trade tensions initiated by Trump’s trade war.
Potential Investors and App Development ---------------------------------------
Reports from July indicated that companies like Oracle, Susquehanna International Group, and Andreessen Horowitz were exploring bids for TikTok. Their proposal reportedly involved ByteDance retaining a minority stake while facilitating a sale to U.S. investors. Additionally, TikTok is reportedly working on a new version of their app, with an algorithm trained exclusively on U.S. user data to address privacy and security concerns.
President Donald Trump announced positively on Truth Social that the US-China meeting went “VERY WELL,” stating that a deal was reached concerning a “certain” company that many young Americans want to protect.
Follow Emma Roth for more updates on tech, social media, and streaming industry developments.