US, China strike ‘framework’ for TikTok deal – But who will buy its US business?

The Trump administration has confirmed the establishment of a framework agreement with China to ensure TikTok continues its operations in the United States. This development follows extensive negotiations and ongoing concerns regarding national security linked to TikTok's Chinese parent company, ByteDance, which began during Trump's first term. US Treasury Secretary Scott Bessent announced the news after high-level trade discussions in Madrid. He highlighted that while the framework is in place, specific commercial terms remain confidential. "It’s between two private parties, but the commercial terms have been agreed upon," Bessent stated to the press. He credited President Trump’s direct involvement for pushing the agreement to completion, asserting, "Without his leadership and the leverage he provides, we would not have been able to include the deal today." Looking ahead, Trump is anticipated to speak with Chinese President Xi Jinping on Friday to finalize the agreement before a summit scheduled for later this year. TikTok has been under intense scrutiny from lawmakers in Washington, who worry that its ownership could permit access to sensitive user data by the Chinese government. In April 2024, former President Biden enacted a law mandating ByteDance to divest its US TikTok operations within nine months or face a nationwide ban. Despite TikTok briefly going offline in January, Trump’s administration issued a 75-day enforcement delay on his first day back in office, which was later extended twice, the latest extension running until September 17. While critics argue these delays undermine Congress’ intentions, Trump maintains that a negotiated solution would better protect US national security while preserving TikTok for its approximately 170 million American users. China’s chief trade negotiator, Li Chenggang, confirmed the consensus framework reached between the two nations, describing the discussions as productive while cautioning the US. "The outcomes of the trade and economic consultations are hard-won, and the US side should not, on one hand, ask China to accommodate its concerns, while at the same time continue to suppress Chinese companies," Li warned in Madrid. As for who will acquire TikTok’s US assets, multiple bidders have emerged, with Oracle co-founder Larry Ellison being the most prominent contender due to Oracle's role as the app’s US cloud provider. Other interested parties include a consortium led by former Los Angeles Dodgers owner Frank McCourt and Shark Tank investor Kevin O’Leary. However, analysts believe this group may face challenges in securing the necessary financing for a deal that could be worth tens of billions of dollars. Notably, McCourt’s group has proposed acquiring TikTok without its critical recommendation algorithm, which many deem essential to the platform's success, raising doubts about their viability as bidders. Previous attempts to acquire TikTok, such as Microsoft's bid in 2020, have failed, and a joint offer by Oracle and Walmart also collapsed under scrutiny from the Biden administration. The final details of the agreement are expected to be discussed when Trump meets with Xi later this week. US officials state that a formal deal is crucial for the upcoming Trump-Xi meeting in Asia at the end of October. On his social media platform, Truth Social, Trump hinted at the importance of these negotiations, stating, "The big Trade Meeting in Europe between The United States of America and China has gone VERY WELL! It will be concluding shortly. A deal was also reached on a ‘certain’ company that young people in our Country very much wanted to save. They will be very happy!" For the moment, TikTok’s future in the US seems secure, but its fate hinges on the successful execution of this agreement and the identification of an appropriate buyer. With over 135 million active users in America and increasing political implications, the outcome of TikTok’s situation is pivotal in defining US-China tech relations.