Trump and Xi are expected to finalize a long-sought TikTok deal today

President Donald Trump and Chinese leader Xi Jinping are on the verge of finalizing a significant agreement that could see a majority stake of TikTok’s U.S. assets transferred to American investors. This pivotal deal, which has been in negotiation for several years, plays an essential role in the broader context of U.S.-China relations, particularly in the wake of escalating trade tensions. Recent discussions between U.S. Treasury Secretary Scott Bessent and Li Chenggang, China’s vice minister of commerce, have led to a framework for a potential sale of TikTok during diplomatic meetings held in Madrid. This agreement would allow TikTok to continue its operations within the U.S. Former President Joe Biden had previously enacted a bipartisan law that mandated TikTok to relinquish at least 80% of its assets to U.S. operators by January 19, or face a ban. Though specific terms of the deal remain undisclosed, sources indicate that a consortium of U.S.-based venture capital firms, private equity groups, and technology companies, including Oracle, Andreessen Horowitz, and Silver Lake, are expected to hold the majority stake. Meanwhile, Chinese investors would retain a 20% stake in the company, under the governance of a majority-U.S. board, which would include an appointee from the Trump administration. According to a senior White House official, any details surrounding the TikTok framework are speculative until publicly announced by the administration. TikTok and its parent company, ByteDance, have not commented on the current status of the negotiations. The potential agreement comes as both leaders prepare for a long-awaited meeting, which U.S. officials have indicated is contingent upon finalizing the TikTok deal. Without such an agreement, a summit between Trump and Xi would be unlikely. The timing of this deal also coincides with Trump’s upcoming visit to Asia at the end of October. China has historically resisted allowing ByteDance to divest its U.S. stake, but as trade relations soured, particularly highlighted by China's recent claims against Nvidia regarding antitrust violations, there appears to be a shift in approach. The groundwork for an American-led investor group to acquire TikTok's U.S. assets was reportedly laid as early as April. Despite multiple delays caused by tariffs and other trade barriers, renewed interest from both Trump and Xi has reignited discussions about TikTok. Key issues, including U.S. national security concerns and China’s approval, still need resolution. On January 18, TikTok faced a temporary blackout in the U.S. just before the enforcement of the Foreign Adversary Controlled Applications Act, but Trump pledged to protect U.S. companies from penalties related to hosting TikTok. The law grants the president significant authority over enforcement, and Trump has postponed the enforcement date several times. As Trump’s perspective on TikTok evolved, recognizing its potential as a tool for rallying younger voters for his 2024 campaign, the urgency around the deal has intensified. With approximately 170 million users in the U.S., TikTok serves a vital demographic that could significantly impact upcoming elections. As of Monday, Trump has reiterated that a deal is imminent, but tangible progress had only emerged recently.