On Friday, former President Trump hinted that Chinese President Xi Jinping had given the green light to a deal aimed at separating TikTok from its parent company, ByteDance.
Following a phone conversation with Mr. Xi, Trump took to Truth Social, stating: “The call was a very good one, we will be speaking again by phone, appreciate the TikTok approval.” He also added that “progress was made on many very important issues,” explicitly mentioning the TikTok deal’s approval. However, he offered no further details on the specifics of this alleged approval.
A statement from China’s state-run news agency echoed this ambiguity, though it did indicate Mr. Xi’s apparent preference for a commercial resolution for TikTok. The report quoted Xi as saying the Chinese government “respects the wishes of the company in question and is glad to see business negotiations in line with market rules and a solution that conforms to Chinese laws and regulations and takes into account the interests of both sides.”
Since January, TikTok’s presence in the United States has been precarious. A federal law mandates that the company divest from its Chinese ownership or face a nationwide ban. This legislation was enacted to mitigate national security concerns, fearing that Beijing could exploit the app to disseminate propaganda or gather sensitive user data. Notably, Trump has already postponed this crucial deadline on four separate occasions.
For several months, ByteDance has engaged in discussions to spin off TikTok’s American operations into a new entity. This strategy involves bringing in new U.S. investors, such as the tech giant Oracle, to reduce Chinese ownership and comply with legal mandates. Sources close to the negotiations reveal that the roster of potential investors has seen frequent changes.
In a statement issued Friday, ByteDance expressed gratitude to both leaders for “their efforts to preserve TikTok in the United States.” The company further pledged to “work in accordance with applicable laws to ensure TikTok remains available to American users through TikTok U.S.”
The app’s destiny is now intertwined with broader trade negotiations between the United States and China, which involve ongoing disputes over tariffs, China’s mineral supply, and other contentious issues. In his recent post, Trump announced plans to meet Xi at an upcoming South Korea summit this fall, followed by a visit to China early next year, with Xi expected to reciprocate.
Historically, President Trump has a track record of announcing significant deals that ultimately do not fully materialize. This year alone, he has unveiled numerous trade agreements, only for some foreign partners to later challenge the described terms. Several of these, including trade deals with Vietnam and South Korea announced in July, are still pending completion.
His agreements with China have also seen similar inconsistencies. For instance, in 2020, he announced a trade deal where China was to purchase an additional $200 billion in American goods and services by 2021. However, a 2022 review of trade data revealed that China acquired only 57 percent of the promised exports.
On Thursday, Trump revealed an additional detail regarding the TikTok agreement: the United States would receive a “tremendous fee” for facilitating the deal. Should this come to pass, it would mark another instance of government involvement in corporate transactions. Recently, the Trump administration has already secured a 10 percent stake in Intel and a “golden share” in U.S. Steel, as part of its acquisition by Nippon Steel.
The initial hint of a resolution came from Treasury Secretary Scott Bessent, who announced a “framework” for a deal to maintain TikTok’s operations in the United States during a Monday news conference in Madrid.
Previously, Chinese officials had pledged to resist any forced sale of TikTok. In 2020, China even updated its export control list to encompass crucial technologies such as algorithms and source codes.
Li Chenggang, China’s vice minister of commerce, explained in Madrid on Monday that China agreed to a TikTok deal with the U.S. because “this consensus serves the interests of both sides,” as reported by Chinese state media.
Just one day prior to TikTok’s divestment deadline, Trump granted a fourth extension this year, pushing it to mid-December. Given the president’s recent remarks about the deal’s approval, this extension might indeed be the last.