US-China TikTok deal | All you need to know

The United States and China have come to a “framework” agreement about TikTok’s future in the US, just days before a planned ban on the app. Originally set to be banned on Wednesday, the deadline has now been extended by US President Donald Trump to December 16.

This marks the fourth delay of a law aimed at forcing TikTok’s Chinese parent company, ByteDance, to sell its US operations.

Details of the US-China TikTok deal


TikTok’s US operations are set to be managed by a group of investors including Oracle, Silver Lake, and Andreessen Horowitz (a16z), according to the Wall Street Journal. The deal will enable TikTok to keep operating in the US, with its American assets shifting from ByteDance to US-based owners.

The plan involves creating a new company to run TikTok, where US investors would own around 80% of the business, with the remainder held by Chinese shareholders. The company’s board would be mostly American, including one member appointed by the US government.

This new agreement closely mirrors a deal that was proposed earlier this year. That deal, however, was stalled when China refused approval, following tensions after Trump announced high tariffs on Chinese imports.

The report added that Oracle will manage user data from its data centres in Texas. However, the US and China are still negotiating the finer details of the deal, and its terms could still change.

In addition, current TikTok users will be asked to move to a new app, which TikTok has already developed and is currently testing.

The current deal is expected to be finalised in 30 to 45 days, CNBC said.

China’s POV

China, on Wednesday, described the TikTok deal as a "win-win", according to a state media editorial.

Investors from both the US and China are now awaiting a call between President Trump and Chinese President Xi Jinping, scheduled for Friday, when the agreement is expected to be confirmed.

The People’s Daily, the official newspaper of China’s Communist Party, commented: "China reached the relevant consensus with the United States on the TikTok issue because it is based on the principles of mutual respect, peaceful coexistence and win-win cooperation."

What happens to TikTok's algorithm?

One of the main sticking points in past negotiations was the future of TikTok’s recommendation algorithm, seen as one of its most valuable features and a key reason for its global popularity.

In 2020, during Trump’s first term, the US attempted to force a sale of TikTok’s US business. China responded by updating its export control laws to cover technologies such as recommendation algorithms, giving Beijing more say in any transfer of that technology.

Wang Jingtao, deputy director of China’s Central Cyberspace Affairs Commission, has confirmed that both sides have now agreed to allow the use of TikTok’s intellectual property, including its algorithm, according to the Associated Press.

The editorial also noted that China will review technology exports and IP licensing matters according to its laws.

Why was a ban on TikTok proposed?

The original push to ban TikTok came from Trump during his first term. The American president had labelled the app a threat to US national security. However, his executive orders were never enforced, as he lost the 2020 election to Joe Biden.

US officials have long been concerned that TikTok could collect data on American users or manipulate content shown to them. However, TikTok has repeatedly denied sharing any data with Chinese authorities and has challenged several restrictions in court.

Under former President Biden, the ban was set to begin on January 19, 2025, just a day before Trump’s second inauguration. The outgoing president, however, left the decision to his successor. But since returning to office, Trump has changed his tune, pushing the ban deadline four times.