Trump delays TikTok ban for fourth time to allow for US-China deal
News Summary
On September 16, 2025, President Donald Trump extended the deadline for TikTok's forced divestment in the US for the fourth time, paving the way for a US-China deal that would keep the popular video app operational for 170 million American users. Talks in Madrid this week produced a framework for a new US-based entity to control TikTok, with American investors holding an 80% stake and Chinese shareholders just under 20%, according to sources familiar with the matter cited by The Wall Street Journal. The consortium includes Oracle, Silver Lake, and Andreessen Horowitz, alongside existing ByteDance backers such as Susquehanna International, KKR, and General Atlantic. Oracle would manage US user data, and the new company would be run by a board dominated by Americans, with one seat designated by the US government. As part of the proposed deal, Chinese developers would allow American software engineers to build a replacement app for US users, recreating content-recommendation algorithms using licensed technology from ByteDance. China's top cyberspace regulator confirmed a “basic consensus” had been reached, agreeing to license TikTok’s algorithm and other IP, and entrusting US user data operations to the new company. The deal still requires approval from US national security officials and members of Congress, who remain wary of Chinese influence and technology risks. President Trump and Chinese President Xi are scheduled to speak on Friday to finalize the agreement.
Background
Previously, a 2024 law, initially signed by President Trump's predecessor Joe Biden, mandated TikTok's Chinese parent company, ByteDance, to sell its US operations or face a nationwide ban. Since the start of his second term, President Trump has issued multiple executive orders instructing the Justice Department not to enforce the ban, providing ByteDance time to secure a sale. US-China relations have been strained, particularly over trade, with both sides imposing tariffs on each other's imports, destabilizing ties between the world's two largest economies. The TikTok dispute has been a prominent point of friction in the technology and national security spheres, with US officials expressing concerns over potential Chinese access to American user data and influence via the app's algorithm.
In-Depth AI Insights
1. What are President Trump's deeper motivations for repeatedly delaying the TikTok ban and actively pushing for this deal? - The Trump administration likely views TikTok's fate as a key bargaining chip in broader US-China geopolitical negotiations. By granting multiple extensions, he maintained pressure on ByteDance while creating space for a wider agreement with China, potentially encompassing trade or other strategic areas. - Securing an “American-controlled” deal allows him to score domestic political points, demonstrating a firm stance on US national security while avoiding the potential backlash from millions of young voters that an outright ban might cause. - Allowing China to retain a minority stake and algorithm licensing might be a pragmatic balance between national security concerns and avoiding complete economic decoupling, leaving room for future technological cooperation or limited mutual investment. 2. What does the framework of this TikTok deal imply for the trend of US-China tech decoupling? - This agreement could signal a new model of “selective decoupling” or “controlled integration,” where limited cooperation in critical technology and data sectors is achieved through ownership structures, data hosting, and algorithm licensing under “American control,” rather than complete separation. This might serve as a template for future cases. - However, it does not necessarily mean a reversal of the decoupling trend. US vigilance towards Chinese technology persists, especially in core areas like semiconductors and AI. The TikTok case is unique due to its massive user base and cultural influence, making an outright ban a costly proposition. - For investors, this implies that US-China tech interactions will be more complex and nuanced, requiring a delicate balance between national security redlines and commercial interests. Neither complete decoupling nor full integration appears to be a short-term outcome. 3. What long-term impacts and risks might this deal bring for US tech companies with operations in China or reliant on Chinese tech licenses, and for Chinese tech companies seeking US market access? - For US tech companies, this agreement might offer a potential framework for collaborating with Chinese tech firms under controlled conditions, but it also highlights that equity, data sovereignty, and algorithm control will be central negotiation points in future partnerships. Compliance costs and geopolitical risk premiums will persist. - For Chinese tech companies, the TikTok case demonstrates that even under intense scrutiny, retaining some US market access might be possible through structural adjustments and compromise (e.g., ceding majority ownership, data localization, algorithm licensing). However, this entails significant political and commercial costs, and successful precedents might be difficult to replicate. - In the long term, this deal may reinforce the principle of “national security review first,” subjecting all cross-border technology investments and collaborations to stricter scrutiny. Intellectual property protection and data sovereignty will remain ongoing investment risks, and investors should be wary of sudden policy changes and regulatory uncertainties.