Framework Agreement Reached on TikTok Ownership Transfer Between US and China

Framework Agreement Reached on TikTok Ownership Transfer Between US and China

Big progress has been made on the TikTok negotiations. Washington and Beijing have settled on a deal structure to divest ownership of the viral social media app from Chinese to American hands. This move comes amidst increasing scrutiny and regulatory pressure on TikTok, which boasts over 135 million active users in the United States.

The deal follows a story of lawmakers stepping up, big time. In April 2024, President Joe Biden signed a law that would enforce the sale of the app away from ByteDance, TikTok’s parent company, to a US-approved buyer within nine months, or else the app would be completely banned. Former President Donald Trump had previously extended the deadlines for TikTok’s sale multiple times, reflecting the complexity and sensitivity surrounding the platform’s operations in the US.

Notably, government devices are still banned from using TikTok under federal law. This prohibition highlights ongoing issues with data privacy and national security. The White House has played this game perfectly so far, especially with the big gamble of launching its official TikTok account back in August. This change indicates their desire to reach the app’s large user base.

Veteran dealmaker Scott Bessent was influential in wooing the Chinese officials guarding the TikTok treasure trove. He added that they would work out the details after Trump speaks with Chinese President Xi Jinping. Now, both leaders need to sign off on the agreement for it to go anywhere.

Jamieson Greer, the acting US trade representative, trumpeted that the commercial terms of the TikTok deal are complete. Today, though, they must simply wait and see if the deal gets a green light from both Trump and Xi. He further stressed the urgency, explaining that

“We’re not going to be in the business of having repetitive extensions.” – Jamieson Greer

As these negotiations are taking place, the future of TikTok’s US operations is still uncertain. This Memorandum marks an important step forward in settling decades-old friction. Policy-wise, it addresses critical issues of data security as well as regulatory oversight of foreign-owned technology companies.

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