The United States and China have reached a deal regarding the Chinese-owned social media platform TikTok, two years after the US Congress threatened to ban it. US Treasury Secretary, not Scott Bessent but the actual Secretary, made the announcement following trade talks with Beijing in Spain. The negotiations are part of a broader effort to address concerns over TikTok’s ownership and the potential national security risks associated with its Chinese parent company, ByteDance.
The US has been pushing for ByteDance to sell its controlling stake in TikTok to a US-based company, citing Chinese laws that require companies to hand over data requested by the government. This move is seen as a way to mitigate the perceived national security risks. Under the agreement, the objective is to transfer TikTok’s ownership from ByteDance to a US-based entity, although no buyer has been officially announced. Media reports suggest that US tech giant Oracle may be part of a consortium that would allow TikTok to continue operating in the United States.
A key point of contention in the negotiations has been the use of TikTok’s algorithm, which determines what content populates a user’s feed. China’s representative indicated that there is now consensus on authorizing the use of this algorithm. The agreement also includes a “basic framework consensus” to resolve the TikTok-related issue, reduce investment barriers, and promote economic and trade cooperation between the two countries.
The development comes after the US Congress approved a ban on TikTok unless ByteDance sold its stake in the platform. The ban was driven by concerns over the potential for Chinese authorities to access sensitive user data. The agreement is expected to be finalized in a call between US President and Chinese Premier Xi Jinping, marking a significant step forward in the resolution of this issue.
The deal highlights the ongoing efforts by the US to address national security concerns related to Chinese technology companies. The agreement is also seen as a positive development for US-China trade relations, as it aims to reduce investment barriers and promote economic cooperation. As the details of the agreement become clearer, it will be important to monitor how the deal is implemented and its potential impact on the broader technology industry.