On Tuesday, President Donald Trump announced that a deal had been reached between the US and China to allow TikTok to continue operating in the United States. Three sources with knowledge of the matter stated that the agreement is similar to a deal previously discussed this year.
The agreement necessitates the transfer of TikTok’s American assets from its Chinese parent company, ByteDance, to new US owners, potentially bringing an end to a saga that has lasted for nearly a year.
This deal for the popular social media app, which boasts 170 million US users, represents a significant breakthrough in the months-long talks between the world’s two largest economies as they aim to de-escalate a broad trade war that has rattled global markets.
“We have a deal on TikTok… We have a group of very big companies that want to buy it,” Trump said during a White House briefing, without offering further details. The announcement came just one day before a September 17 deadline to either sell or shut down the short-video app.
Later that same day, the White House extended the deadline until December 16, declining to provide any further specifics about the agreement with China.
The delay grants ByteDance an additional 90 days to finalize the complex transaction of transferring TikTok’s American assets to US owners, indicating that substantial work remains to be done.
According to a report by the Wall Street Journal, the new US entity will have an American-dominated board, with one member designated by the US government.
This concept borrows from a recent national security agreement signed by the Trump administration that permitted Nippon Steel to acquire US Steel after the US was given the right to appoint a board member and hold a “Golden Share.”
Any final agreement may require approval from the Republican-controlled Congress, which, during the Biden Administration in 2024, passed a law mandating TikTok’s divestiture due to concerns that the Chinese government could access US user data, enabling Beijing to spy on Americans or conduct influence operations via the app.
Two of the sources said the core terms of the new deal, which are also similar to those from April, will allow ByteDance to retain the single largest ownership stake at 19.9%, just below the law’s 20% threshold.
While the broad terms are expected to hold, the sources noted that the final deal could look different due to the potential for last-minute changes.
US Treasury Secretary Scott Bessent told CNBC on Tuesday that the commercial aspects of the deal were essentially finalized around March, with only a few details left to resolve.
“This deal wouldn’t be done without proper safeguards for US national security,” Bessent said. “It seems as though we were also able to meet the Chinese interest.”
CNBC reported on Tuesday that the deal is expected to close within the next 30 to 45 days and will include both existing and new investors in TikTok’s China-based parent, ByteDance.
These details align with Reuters’ reporting from April, which stated that the deal would spin off TikTok’s US operations into a new US-based company that would be majority-owned and operated by US investors.
Some of ByteDance’s American backers include Jeff Yass’s Susquehanna International Group, General Atlantic, Kohlberg Kravis Roberts, and Sequoia Capital.
The Trump administration has so far not enforced the law, concerned that it would anger TikTok’s large user base and disrupt political communications. Instead, it has extended the divestiture deadline on three separate occasions.
Trump, who has credited TikTok with helping him win re-election last year and has 15 million followers on his personal account, was widely expected to extend the deadline for a fourth time. The White House also launched an official TikTok account last month.
Tariffs and TikTok
A deal for TikTok, which had been in the works this spring, was put on hold after China indicated it would not approve it following Trump’s announcements of tariffs on Chinese goods.
Washington has consistently argued that TikTok’s ownership by ByteDance makes it subject to control by the Chinese government.
However, the company has countered that US officials have misrepresented its ties to China, asserting that its content recommendation engine and user data are stored on Oracle-run cloud servers in the US, and that content moderation decisions for American users are also made within the country.
CNBC reported on Tuesday that Oracle will maintain its cloud deal with TikTok. Earlier this year, Reuters had reported that the White House was developing a plan to enlist Oracle, along with a group of outside investors, to oversee the app’s operations.
As part of that plan, Oracle would have been responsible for addressing national security concerns, according to Reuters’ reporting.
Following the news, Oracle’s shares pared some of their gains on Tuesday but were still up 1% at the close.
A framework agreement was reached between officials from both countries on Monday. A final confirmation of the deal is expected on Friday during a call between Trump and Chinese President Xi Jinping.
In March, Trump had mentioned that his administration was in contact with four different groups regarding the sale of TikTok. According to various reports, these bidders included Microsoft, Amazon, billionaire Frank McCourt, and a consortium led by the founder of OnlyFans.
