US and China Reach Framework Deal on TikTok Sale

Strategic Insights -

A framework deal has been reached between the United States and China to resolve their dispute over the Chinese-owned social media app TikTok, with the Chinese-owned app set to pass to US-controlled ownership. The deal was announced after a second day of talks between US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng in Madrid, which also includes discussions about the wider US-China trade dispute. The agreement came after President Trump said a deal was reached with a "certain company that young people in our Country very much wanted to save. They will be very happy!" Trump added that he would speak to Chinese President Xi Jinping on Friday to "complete" the agreement. Meanwhile, a senior Chinese official said the two sides "reached a basic framework consensus on resolving issues related to TikTok through cooperation, reducing investment barriers and promoting relevant economic and trade cooperation."

Key Takeaways:

  • The US and China reached a framework deal on the sale of TikTok, with the Chinese-owned app to pass to US-controlled ownership.
  • The deal came after a second day of talks between US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng in Madrid.
  • The agreement includes discussions about the wider US-China trade dispute.
  • US President Trump said a deal was reached with a "certain company that young people in our Country very much wanted to save. They will be very happy!"
  • Trump added that he would speak to Chinese President Xi Jinping on Friday to "complete" the agreement.
  • A senior Chinese official said the two sides "reached a basic framework consensus on resolving issues related to TikTok through cooperation, reducing investment barriers and promoting relevant economic and trade cooperation."
  • Vice Minister of Commerce Li Chenggang said China will "firmly safeguard the national interests, the legitimate rights and interests of Chinese enterprises."
  • The deal leaves data and algorithm safeguards unclear, as warned by Sarah Kreps of Cornell University's Tech Policy Institute.
  • The US-China trade truce has been an uneasy one, with Washington accusing Beijing of violating their agreement and slow-walking export license approvals for rare earths.

Statistics:

  • TikTok boasts almost two billion global users.
  • A federal law requiring TikTok's sale or ban on national security grounds was due to take effect on January 20.
  • Trump extended a deadline for the popular video-sharing app by another 90 days to find a non-Chinese buyer or be banned in the United States.
  • The extension is due to expire on Wednesday.
  • The talks in Madrid also cover Trump's threat of steep tariffs on Chinese imports.
  • The United States has imposed 30 percent duties on imports of Chinese goods, while China has hit US products with a 10 percent levy.
  • The temporary truce expires in November.

Sources:

  • Xinhua
  • US Treasury Department
  • Chinese Ministry of Commerce
  • Cornell University's Tech Policy Institute