CaliToday (17/92025): In a significant diplomatic breakthrough, the United States and China have reached a framework agreement to restructure TikTok’s U.S. operations, a move designed to avert a nationwide ban of the wildly popular social media app. According to sources close to the high-stakes negotiations, the deal will establish a new U.S.-based entity with a majority-American board of directors, which could include a U.S. government-appointed member, to oversee the platform and resolve Washington's long-standing national security concerns.
The announcement marks a pivotal moment in a multi-year saga that has pitted geopolitical tensions against the cultural and economic force of a platform used by over 170 million Americans. The deal was reportedly solidified during recent trade talks in Madrid between U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. U.S. President Donald Trump and Chinese President Xi Jinping are expected to finalize the agreement in a phone call later this week.
For years, U.S. lawmakers from both parties have voiced fears that TikTok’s parent company, the Beijing-based ByteDance, could be compelled by Chinese national security laws to hand over sensitive data on American users or manipulate the content they see. These concerns culminated in the passage of a bipartisan law in 2024 requiring ByteDance to divest its U.S. assets or face a ban—a deadline President Trump has repeatedly extended.
Under the terms of the newly forged agreement, a new company, tentatively named TikTok Global, will be created to handle all U.S. operations. To satisfy American demands, the structure will reportedly feature:
A U.S.-Majority Board: The new company's board of directors will be predominantly composed of American citizens, a key requirement to ensure decisions are made in line with U.S. interests.
Government Oversight: In an unprecedented move for a social media platform, the board is expected to include a seat designated by the U.S. government, providing direct oversight on matters of security and content moderation.
American-Led Ownership: A consortium of U.S. investors and companies will take a majority stake in the new entity. ByteDance is expected to retain a significant minority stake, structured to comply with U.S. regulations.
Data Security Through Oracle: U.S. tech giant Oracle will continue its role in storing and securing all U.S. user data on its domestic cloud infrastructure, creating a firewall to prevent unauthorized access from abroad.
Algorithm Licensing: A major sticking point in past negotiations, TikTok’s valuable recommendation algorithm will reportedly be licensed to the new U.S. entity, allowing the app to function while its source code is subject to security reviews.
The breakthrough comes just ahead of the latest September 17 deadline. President Trump, who once pushed to ban the app during his first term, has recently championed a deal, acknowledging the platform's immense popularity and its role in reaching younger voters during his 2024 campaign.
Chinese officials have confirmed that a "basic framework consensus" has been reached. Li Chenggang, China's international trade representative, stated the agreement was achieved through a cooperative approach aimed at reducing investment barriers.
However, the deal is likely to face intense scrutiny from lawmakers in Washington. Members of the House Select Committee on China have previously insisted that any agreement must ensure a complete operational separation from ByteDance, particularly concerning the algorithm. The inclusion of a government-appointed board member appears to be a direct attempt to address these deep-seated security concerns.
While the commercial terms of the deal remain private, this government-brokered agreement signals a potential path forward for other technology companies caught in the crossfire of U.S.-China strategic competition. For now, TikTok's millions of American users can breathe a sigh of relief as the app has been pulled back from the brink of a ban.
