US and China reach framework for US-controlled TikTok ownership

• ByteDance, the app’s Chinese parent, has yet to disclose whether it will license or fully transfer key intellectual property like recommendation algorithms to a US purchaser.

The ongoing rivalry between the United States and China took a significant turn this week, as officials announced a breakthrough framework to transfer TikTok’s US operations to American control.

While months of negotiation had previously produced little progress, both sides now signal cautious optimism that a final deal is within reach, pending a scheduled Friday call between President Donald Trump and President Xi Jinping.

The stakes are high. With 170 million US users, TikTok represents both a cultural powerhouse and a potential national security flashpoint. The new agreement, described by negotiators as a framework, comes just ahead of a looming September 17th deadline that could have resulted in TikTok being banned from American app stores.

US Treasury Secretary Scott Bessent said the talks in Madrid were productive, noting that the deadline itself drove both parties to make critical concessions. There’s even a possibility of extending the deadline by up to 90 days to iron out remaining issues.

Details remain closely guarded, but American officials emphasise that US national security is at the agreement’s core, while Chinese negotiators have focused on preserving cultural “characteristics” of the app—features they consider an asset of soft power.

“They care about the Chinese identity within the app. For us, it’s a matter of national security,” Bessent clarified.

Demand strict separation of user data

President Trump, who owes part of his own political communication success to TikTok’s broad reach—his official channel boasts 15 million followers—has signaled that any Chinese stake in the restructured entity is still under review.

While lawmakers in Congress, especially after passing a 2024 divestiture law, demand strict separation of user data and algorithms from Chinese control, the administration remains wary of triggering backlash among TikTok’s American fans and social media influencers.

The path to a final agreement is complicated. The Republican-controlled Congress will need to review and likely approve the arrangement. ByteDance, the app’s Chinese parent, has yet to disclose whether it will license or fully transfer key intellectual property like recommendation algorithms to a US purchaser.

Chinese officials, for their part, describe the process as an exercise in “basic framework consensus,” and maintain that concessions must be mutual, rather than unilaterally imposed on Chinese firms.

This budding agreement is taking shape against a backdrop of broader US-China tensions. The two largest economies have clashed over everything from chip exports and rare earth supplies to the regulation of technology giants like Nvidia.

The most recent meeting at Madrid’s ornate Palacio de Santa Cruz marked the fourth high-level negotiation in as many months, a testament to the rocky diplomatic terrain.

Own foreign policy goals

Even as both countries wrangle over TikTok and tariffs, each side is weighing how far it’s willing to go to protect domestic tech champions and pursue their own foreign policy goals.

The Biden administration (and previously the Trump administration) has blocked Chinese products cited as security risks, while Beijing counters with its own investigations and regulatory crackdowns, as seen in its fresh probe of Nvidia for alleged antitrust violations—a move widely viewed as retaliation.

As Friday’s call between Trump and Xi approaches, top US and Chinese officials continue to debate, compromise, and jockey for advantage, fully aware that TikTok’s fate is tied to the larger contest for global tech supremacy.

With the threat of a ban hanging over millions of American users, the outcome could shape digital policy, international trade, and the fortunes of Silicon Valley and Shenzhen alike.