President Trump recently indicated that China’s top leader, Xi Jinping, has greenlit a deal to separate TikTok from its Chinese parent company, ByteDance. Following a phone call with Mr. Xi, Trump shared on Truth Social, ‘The call was a very good one, we will be speaking again by phone, appreciate the TikTok approval.’ However, he offered no further specifics about the supposed agreement. A statement from a Chinese state-run news agency echoed this vagueness, though it suggested Mr. Xi is open to a market-driven commercial resolution for TikTok. According to the report, Mr. Xi emphasized China’s respect for corporate autonomy and its welcome of commercial negotiations that adhere to market principles, comply with Chinese laws, and balance all relevant interests.
TikTok’s operational status in the United States has been precarious since January, when a federal law mandated the company either find a non-Chinese owner or face a nationwide ban. This legislation aimed to address national security fears that Beijing could leverage the app for propaganda or to gather sensitive American data. Trump has already extended the deadline for this transition four times this year.
For several months, ByteDance has been actively negotiating to divest TikTok’s American operations into a new entity. This plan involves bringing in new U.S. investors, such as the software giant Oracle, to diminish Chinese ownership and meet the legal requirements. The roster of potential investors has reportedly been fluid.
Adding another layer to the saga, Mr. Trump stated Thursday that the United States would receive a ‘tremendous fee’ for facilitating this deal. If this materializes, it would mark another instance of direct government involvement in corporate transactions. The Trump administration has recently secured a 10 percent stake in Intel and a ‘golden share’ in U.S. Steel as part of its sale to Nippon Steel.
Treasury Secretary Scott Bessent initially revealed a ‘framework’ for a deal to keep TikTok functioning in the United States during a Monday news conference in Madrid. Previously, Chinese officials had publicly vowed to resist a forced sale of TikTok, and in 2020, they updated their export control list to encompass crucial technologies like algorithms and source codes.
Li Chenggang, China’s vice minister of commerce, explained in Madrid that China agreed to a TikTok resolution with the United States because ‘this consensus serves the interests of both sides.’ This statement followed discussions with American officials and was reported by Chinese state media.
Just one day before TikTok’s deadline to separate from ByteDance, Mr. Trump issued his fourth extension of the year, pushing it to mid-December. With the president’s latest suggestion of an approved deal, this extension could potentially be the last one.