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Bessent, Scott

Trump Announces Deal with China on TikTok, Avoids Nationwide Ban

Strategic Insights

— 1 min read

President Donald Trump has announced a deal between the United States and China to shift ownership of the popular video app TikTok, averting a nationwide ban. The agreement would make "young people in our Country... very happy!" according to Trump, but he provided no details about the terms. The deal comes after a year of controversy over the app's potential ties to the Chinese government and concerns about user data.

Key Takeaways:

  • The deal would involve ByteDance, the Chinese tech giant that currently owns TikTok, shifting ownership of the app to a new entity.
  • The agreement would avert a nationwide ban on TikTok, which was required by a law signed by President Joe Biden last year.
  • Chinese government officials have stated that the two sides have reached a "basic consensus" and will work to "examine and approve" the deal.
  • Oracle, a tech giant led by Trump ally Larry Ellison, could hold a stake in the new entity as part of the deal.
  • The deal was negotiated with help from Vice President JD Vance and other Trump administration officials.
  • The proposal involves creating a new U.S. entity with a consortium of investors, including Oracle, Andreessen Horowitz, and private equity firms.
  • The White House had previously discussed an option where ByteDance would retain control of the algorithm and lease it to a new American spin-off of TikTok.
  • The deal would resolve a contentious issue between the U.S. and China over the app's ownership and potential ties to the Chinese government.

Statistics:

  • 170 million users in the United States use TikTok.
  • $10 billion in revenue generated by TikTok in the U.S. last year, largely from advertising, viewer tips, and e-commerce sales.
  • The Chinese government has criticized American lawmakers' demands that ByteDance sell the app, saying it was "robbers' logic."
  • The current deadline for ByteDance to sell TikTok by Jan. 19, 2025, or face a ban, is set to expire this month.

Sources:

  • Drew Harwell, The Washington Post.
  • Statement by President Donald Trump.
  • Statement by Treasury Secretary Scott Bessent.
  • News conference by Chinese government officials.
  • Statement by Oracle.
  • Statement by ByteDance.

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