US-China Trade Negotiations: Framework of Agreement Achieved on TikTok, According to Bessent

Washington and Beijing have established a framework in Madrid for the sale of TikTok's U.S. operations, paving the way for potential American ownership of the platform.

This agreement comes amidst ongoing trade discussions between the two nations, with Treasury Secretary Scott Bessent indicating that Presidents Trump and Xi Jinping are anticipated to conclude the deal on Friday.

Donald Trump reported positive talks, while China confirmed a framework agreement, emphasising no compromise on its firms' interests.

Framework Agreement: Ensures National Security in Trade Talks

TikTok's Chinese owner faces a Wednesday deadline to sell its US operations or risk a ban due to national security concerns. This deadline, the latest of three extensions, is scheduled to end on September 17.

Notably, the ownership of TikTok was a significant issue in US-China trade talks, perceived as crucial for Beijing's negotiation of reduced tariffs and trade barriers with the US. Following negotiations aimed at ending a trade war, a “framework” deal was announced, with terms designed to safeguard US national security interests.

Moreover, US trade representative Jamieson Greer stated that a recently struck deal was contingent on leader approval and indicated an unwillingness to implement further repetitive extensions.

Likewise, China's lead trade negotiator, Li Chenggang, conveyed that his nation would not compromise its principles for a US agreement and that leadership would review any potential deal before its finalisation.

The US Supreme Court upheld a law enacted in April 2024 that mandates ByteDance sell its US division of TikTok or face a ban. TikTok experienced a one-day outage after the law took effect in January, before President Trump issued a 75-day postponement.

Besides, the US Justice Department asserts that TikTok's data access on American users constitutes a significant national security threat. Conversely, ByteDance maintains its US operations are independent, denies sharing data with the Chinese government, and contends that a ban would infringe upon the free speech rights of its 170 million US users.

Previously considered prospective buyers for the platform include Oracle co-founder Larry Ellison, YouTube personality MrBeast, and investor Frank McCourt.

Beijing's Involvement in TikTok's Algorithm Control

Details of the TikTok deal remain limited, with experts expressing scepticism regarding control over the platform's recommendation algorithm and the domestic storage and encryption of American user data.

Sarah Kreps of Cornell University noted that unresolved issues, such as independent audits for potential backdoor access by Beijing, could leave core vulnerabilities untouched despite a resolution of ownership on paper.

Furthermore, Jim Secreto, a former Biden administration national security official, stated that Beijing's control over the algorithm's transferability explains its integration into broader trade and tariff negotiations for TikTok.

He noted that addressing national security concerns would represent a significant breakthrough, highlighting the high stakes given ByteDance's status as a major Chinese AI firm still operating as it did when Congress deemed action necessary.

Ultimately, Mr. Secreto stated that data collected by TikTok from Americans could potentially be used to train models that support China's military and intelligence capabilities.

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