After months of high-stakes negotiation, U.S. Treasury Secretary Scott Bessent announced a framework agreement with China aimed at keeping TikTok up and running in the U.S., under new ownership. The deal emerged during trade and economic talks in Madrid.
The core of this deal: ByteDance will divest TikTok’s U.S. operations, shifting control to one or more U.S.-based entities. At the same time, China will retain some “Chinese characteristics” of the app, including use of its algorithm/licensing of intellectual property under certain conditions, and oversight of U.S. user data under trusted third-party or “entrusted” operation.
President Trump is set to discuss final terms in a call with President Xi Jinping later this week, the finish line of a complicated journey that involves national security laws, trade pressure, and popular demand.
What Led Here: Laws, Deadlines, and Pressure
The backdrop: In April 2024, Congress passed the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA), which requires ByteDance to sell its U.S. operations of TikTok or face a ban.
Since then, deadlines have been imposed and extended, as the U.S. pushed toward divestment. Under the Trump Administration, enforcement was delayed multiple times while negotiations continued. The September 17 deadline loomed large. Hardline pressure from U.S. officials and the threat of a full ban gave the U.S. leverage in Madrid.
China’s position throughout has included demands that its “soft power” value tied to the app’s algorithm and cultural influence be preserved, along with protections for Chinese ownership of intellectual property or limited stakes. The Chinese side also seeks reduced trade barriers, investment openness, and assurances that actions against Chinese tech firms will not continue unchecked.
What Still Isn’t Clear — And What Could Blow Up
Even though a framework is in place, many key problems remain unsolved.
One big question: Will China surrender control (or enough rights) over TikTok’s algorithm? That algorithm is at the core of what makes TikTok tick, literally; its recommendation engine is one of its most prized assets. China has strict export-control laws around tech like this, and enabling its transfer or licensing is a tricky business.
Another puzzle: who exactly will buy or manage TikTok’s U.S. operations? Oracle has been discussed, possibly with Ellison, along with other firms, but nothing is settled in public. The ownership structure, share of ByteDance allowed (if any), and who gets to run what all are still under negotiation.
Congress still has a role: the law requiring divestiture is on the books, and any transfer or deal will need to satisfy legal requirements. Critics on both sides warn about free speech, privacy, transparency, and whether the deal really eliminates national security risks or just reshapes them.
What This Means for Users and U.S.-China Tech Relations
For TikTok’s roughly 170 million U.S. users, the worst outcome, a full ban, seems temporarily off the table. The framework suggests you’ll still be able to scroll and post. But expect changes: likely more U.S. oversight of data, possibly modifications to content moderation, and maybe even features or behavior shifts as ownership changes hands.
For U.S.-China relations, this marks a rare step where national security concerns, trade war pressure, and cultural impact collided, and both sides made concessions. If the deal holds up in the Trump-Xi exchange, it could serve as a template for how other tech tensions (AI, export controls, data privacy) get resolved or at least managed.
The framework isn’t the finish line but more like a halftime report. Trump’s conversation with Xi, due Friday, may lock in final terms. Congress will weigh in. Courts may still challenge aspects of the law. And public scrutiny will be intense: how safe is your data? Who really owns the recommendation algorithm? Will part of ByteDance hang on through minority ownership, or will it be cut entirely loose?
If this deal works, it may be the most significant pivot in U.S. tech policy in many years. Whether it protects users, preserves national interests, and balances the increasingly fraught U.S.-China relationship all depends on the details that we still don’t yet fully see.
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