The US Treasury Secretary has announced a framework deal reached with China concerning the ownership of TikTok's operations in the US. Scott Bessent detailed that the agreement was developed during trade negotiations in Madrid, aiming at culminating in a broader agreement between US President Donald Trump and Chinese President Xi Jinping.
Trump took to Truth Social to declare the trade talks were productive, while Chinese officials corroborated the existence of the framework agreement but voiced concerns that their companies' interests should not be jeopardized.
A pressing deadline looms for TikTok's Chinese parent company, ByteDance, to divest its US division or face potential closures and operational bans. Bessent highlighted that the threat of a shutdown helped persuade Chinese representatives to ease their stance on tariff reductions as part of the sale discussions.
In a separate note, US Trade Representative Jamieson Greer mentioned that the negotiated deal is contingent on approval from top leaders, stressing that extensions on bans were not in the agenda.
Chinese negotiator Li Chenggang reiterated that any agreement must align with China’s principles and protect its corporate interests.
Experts remain skeptical regarding the deal. Concerns were raised about who will operate TikTok's influential recommendation algorithms and whether American users' data will be securely stored and managed domestically. Sarah Kreps from Cornell University stressed that without clear guidelines, the ownership change may fail to eliminate critical vulnerabilities.
Former Biden administration security official Jim Secreto warned that control over the algorithm remains a significant factor, suggesting these trade discussions may directly impact US national security. He cautioned that data collected by TikTok could potentially bolster China's military and intelligence advancements.
The US Supreme Court has paved the way for this moment by upholding a law mandating ByteDance’s divestment from TikTok by September. The firm has consistently claimed its operations in the US function independently from the Chinese government.
Potential buyers for TikTok have included notable figures like Oracle co-founder Larry Ellison and influencer MrBeast, although the final sale remains uncertain.
