After years of geopolitical tension and regulatory unpredictability, the United States and China may soon reach an agreement that allows TikTok to remain operational in America. This landmark deal, scheduled to be finalized during a summit between President Donald Trump and Chinese President Xi Jinping in South Korea later this month, represents a critical moment in its saga.

Background and Legislative Pressure

TikTok became more controversial upon passage of the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA) in April 2024, which required ByteDance (TikTok’s Chinese parent company) to cease all U.S. operations by January 2025 or face nationwide ban. ByteDance filed suit challenging this law but ultimately the U.S. Supreme Court upheld its constitutionality leaving little option available. Wikipedia
Proposed Deal
Under the terms of ByteDance’s proposed deal, less than 20% ownership would remain with ByteDance and the remaining 80% would be acquired by a consortium of American and international investors led by Larry Ellison from Oracle; Michael Dell from Dell Technologies; media mogul Rupert Murdoch are said to be involved. Under this new ownership structure, Americans would hold six out of the seven board seats, and access to TikTok’s recommendation system would also be licensed exclusively to this U.S. entity, according to The Guardian newspaper.
National Security Issues are of great concern in this country.

Though changes have been proposed, some U.S. lawmakers remain wary. Representative John Moolenaar of the House Select Committee on China has voiced concerns regarding ByteDance’s involvement in developing TikTok’s algorithm; any Chinese influence could pose national security risks while undermining the intent of its divestiture, according to him. Reuters reports.
Broader Implications
The proposed deal between the U.S. and China over TikTok goes far beyond just being about one app; it reveals much about U.S.-China relations in general and especially their dynamics related to technology and data security. While such an agreement could serve as a template for negotiations involving Chinese tech firms in future negotiations, it also underscores the difficulties associated with reconciling national security concerns with global business interests.

As Presidents Trump and Xi prepare to meet in South Korea, all eyes will be watching closely to see whether they can come up with an agreement that addresses the TikTok issue. While their agreement represents a substantial step forward, questions regarding data security as well as Chinese influence over TikTok remain. Whatever emerges from these talks could have far-reaching ramifications on both the tech industry and international relations.