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A new framework agreement has given TikTok a lifeline in the US, but questions over ownership and algorithm control mean the app’s fate is still hanging in the balance
Donald Trump signed an executive order granting extension to TikTok.
TikTok’s future in the United States has been hanging in the balance for years, but a fresh development has given the app a temporary reprieve. After trade talks in Madrid, US Treasury Secretary Scott Bessent confirmed that Washington and Beijing had reached a basic framework agreement to restructure the app’s American operations. China’s trade envoy Li Chenggang described the deal as part of wider economic cooperation.
The deal is meant to prevent a ban under a 2024 US law that requires TikTok’s Chinese parent company, ByteDance, to divest the app’s US arm or see it shut down. Both sides framed the agreement as a way to keep TikTok accessible for its 170 million American users, while addressing US concerns about data security and China’s reluctance to hand over control of its prized technology.
The immediate threat of a ban has been pushed to 16 December 2025, the fourth deadline extension by President Donald Trump.
Why Did The US Move Against Tiktok In The First Place?
Since 2020, TikTok has been in Washington’s crosshairs. Lawmakers and intelligence officials have repeatedly warned that the app could expose American user data to the Chinese government or be used to influence what people see online.
These fears led Congress to pass a law in 2024 requiring ByteDance to sell off TikTok’s US arm. Earlier this year, the Supreme Court upheld the law, rejecting arguments that it violated free speech protections. The ruling made clear that TikTok can only remain in the US if it is separated from Chinese ownership.
Trump has chosen not to enforce the ban immediately, instead granting three extensions since January 2025, and now a fourth. Democratic lawmakers have argued he may not have the legal authority to do so. According to AP, Trump has no clear legal basis for repeatedly delaying the deadline.
Politics also complicates the picture: Trump himself has a “warm spot” for TikTok, with more than 15 million followers on the app, which he has credited for helping him connect with younger voters.
What Does The New Framework Deal Propose?
The framework has three main elements, but the fine print remains unclear:
- American ownership: TikTok’s US operations would be spun off into a new company majority-owned by American investors. India Today reported that likely participants include Oracle, which already manages TikTok’s US user data, as well as private equity firms Silver Lake and Andreessen Horowitz. The aim is to place both management and board oversight firmly under American control.
- China’s consent: The biggest obstacle has always been TikTok’s recommendation algorithm, the engine that powers its personalised feed. Beijing calls it its most valuable intellectual property and, in 2020, placed it under export control laws to stop it being sold abroad. In Madrid, Chinese cyberspace official Wang Jingtao said there was consensus on allowing the US entity to use TikTok’s algorithm under licence, but ownership would remain with ByteDance.
- Security arrangements: Both sides agreed that a US partner would oversee American user data and content moderation. Oracle is expected to expand its role here, building on an earlier arrangement where it hosted TikTok’s data. The aim is to reassure Washington that data cannot be siphoned overseas.
US Treasury Secretary Bessent said that “commercial terms have been agreed,” but neither side revealed the ownership split, the structure of the board, or how licensing the algorithm would work in practice.
Why Is The Algorithm The Sticking Point?
TikTok’s recommendation algorithm is widely seen as its “secret sauce.” It determines what users see and is credited for the app’s massive popularity. Without it, TikTok would not be the same product.
Reuters reported that China has repeatedly refused to transfer the algorithm, citing it as sensitive intellectual property. Licensing is the only compromise Beijing is willing to make. AP noted that this would mean the US entity could run a licensed version of the algorithm, retrained on American data.
But in Washington, many see this as inadequate. The House Select Committee on China has insisted that “there can’t be any shared algorithm with ByteDance.” Lawmakers argue that unless the algorithm is fully separated, TikTok could still be vulnerable to Chinese influence.
Congressional Approval
Even if Trump and Xi Jinping finalise the framework, it must pass muster in Congress. A congressional aide told Reuters that lawmakers will scrutinise the deal to ensure it meets the 2024 law’s divestment requirement.
Several lawmakers have already voiced scepticism. Senator Tom Cotton, the Republican chair of the Senate Intelligence Committee, said American investors must “cut all ties with China.” Democratic voices, including Rep. Raja Krishnamoorthi, have also flagged concerns that the Chinese Communist Party could still access American data.
If Congress decides the deal does not amount to a full divestment, it could block the agreement. At that point, Trump would have limited options, as the Supreme Court has already upheld the law.
Has A Similar Deal Been Attempted Before?
Yes. A previous attempt in April this year outlined a similar spin-off, but it collapsed when China withheld approval after Trump announced steep tariffs on Chinese goods. As per Reuters, TikTok’s future is not just about national security; it is entangled in the broader US-China trade relationship.
What Happens Next?
Trump has said he will discuss the final contours of the agreement with Jinping. Both sides now have until December 16 to resolve the sticking points:
- Will the US entity truly control the algorithm, or only use it under licence?
- How much ownership, if any, will ByteDance retain?
- What level of government oversight will exist over the new US company?
Until then, TikTok continues to operate in America without disruption.
Karishma Jain, Chief Sub Editor at News18.com, writes and edits opinion pieces on a variety of subjects, including Indian politics and policy, culture and the arts, technology and social change. Follow her @kar…Read More
Karishma Jain, Chief Sub Editor at News18.com, writes and edits opinion pieces on a variety of subjects, including Indian politics and policy, culture and the arts, technology and social change. Follow her @kar… Read More
September 17, 2025, 16:39 IST
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