TikTok Deal: A Transatlantic Tug-of-War for Control

President Donald Trump has announced that his Chinese counterpart, Xi Jinping, has granted approval for the sale of TikTok's U.S. operations to American investors. However, he emphasized that some final steps still need to be clarified. Trump expressed optimism about the progress of the deal following a phone call with Xi and looks forward to the finalization of the sale with anticipation. Both the U.S. and China indicated that further work on details is necessary to reach an agreement regarding the sale of ByteDance's majority shares in TikTok in the United States. China's Foreign Ministry called for fair treatment of Chinese interests and stressed the need for an open and fair environment for Chinese investors. The contact between Trump and Xi occurred shortly after American and Chinese negotiators agreed on a framework for selling the U.S. TikTok shares to a group of American buyers. Although details are scarce, the goal remains to keep TikTok operational in the U.S. and avoid a ban for national security reasons. Trump also floated the idea of a "fee-plus" model for the U.S., though he did not disclose details about the structure or potential government involvement. Reports indicate that a group of American investors, including Oracle, Andreessen Horowitz, and Silver Lake Management, would take control of a new American version of the app. It remains unclear who will control TikTok's valuable recommendation software—a critical point for China. Oracle, an already proven partner in data storage, is expected to continue providing cloud services for TikTok. Oracle's shares rose by 4% on Friday, surpassing the general market trend. ByteDance expressed gratitude to Trump and Xi in a statement and promised to proceed in compliance with Chinese law to continue providing TikTok USA to its American users. Uncertainties also exist regarding the valuation of TikTok's lucrative U.S. operations, estimated at $35 to $40 billion. Trump extended the deadline for the sale by another three months until December. However, this fourth delay has raised legal concerns, as the security law enacted in 2024 allows only a one-time extension. Criticism from Congress suggests that the issue is not yet fully resolved. Politicians emphasize the necessity to strictly separate any operational ties between ByteDance and the new U.S. TikTok. Maintaining national security remains a top priority. How geopolitical factors, the race for artificial intelligence, and trade disputes between the U.S. and China will influence the agreement remains to be seen. China's recent order that ByteDance cannot buy chips from Nvidia anymore illustrates ongoing tensions.