Former President Trump announced on Friday that Chinese President Xi Jinping has approved a deal allowing Tiktok to continue operations in the US, easing months of uncertainty surrounding the app’s future under a recent law. Yet, the specifics of the agreement remain vague, and there’s some ambiguity from the Chinese government. It seems like they want to work towards “appropriate deals on Tiktok,” which sounds a bit uncertain.
Several pressing questions linger in the Tiktok saga:
What role does the ordinance play?
The push to potentially ban Tiktok in the US has mainly stemmed from concerns regarding its parent company, Bytedance, which is based in China. Lawmakers believe that the app, which is used by roughly 170 million Americans, poses national security threats. They’re concerned that user data could be accessed by the Chinese government and that Beijing might manipulate user feeds for its own financial advantage.
A large bipartisan majority in Congress ultimately voted for legislation mandating either the sale of Tiktok or a ban from US networks and app stores, a law that was signed by Biden in April 2024. This law prohibits maintaining operational ties to Tiktok unless the sale is approved.
Recent news indicates that the deal might transfer Tiktok’s ownership to another US entity. The Wall Street Journal reports that US-based investors will be involved, but Chinese shareholders will retain some ownership, in line with the law’s requirement that foreign adversaries’ stakes remain under 20%.
Jim Johnston, a partner at Davis + Gilbert, pointed out that the Trump administration has considerable flexibility in defining what constitutes a “qualified sale.” He expressed that this flexibility could be a powerful tool for the administration to achieve its goals.
What happens to the algorithm?
The recently enacted “divest-or-ban” law also restricts contracts concerning the recommendation algorithms associated with Tiktok. After Secretary of the Treasury Scott Bescent mentioned having a “framework” for a Tiktok contract, Chinese officials hinted that the agreement might involve licensing the app’s algorithm.
Jake Morabito from the American Legislative Exchange Council highlighted that Tiktok’s recommendation algorithm is crucial to its appeal in the US, raising concerns over how this transaction would address national security issues and comply with the law.
Representative John Mourenard, the chairman of the House Committee investigating the Chinese Communist Party, expressed worry about potential licensing agreements that could allow continued influence from the CCP on Tiktok. He emphasized the importance of ensuring that any transaction aligns with the legal requirements set forth.
Former Vice President Pence echoed these concerns, calling the potential agreement “contradictory to our national security.” He insisted that the administration needs to take a firm stance regarding any connection Tiktok has with China, suggesting that a ban should be enforced if necessary.
How long does it take to confirm?
The timeline for finalizing any Tiktok deal remains unclear. Bescent proposed that Trump and Xi could finalize discussions, yet the president’s executive order on Tuesday has postponed the enforcement of the sale or ban until December 16th. This leaves the administration with an additional three months to finalize the details.
Officials seem somewhat skeptical about granting Tiktok further extensions. US trade representative Jamieson Greer mentioned the possibility of another deadline extension but stressed that they wouldn’t continue to engage in repeated expansions.
However, the interpretation of the discussions from Beijing introduces more uncertainty. Despite Trump’s assertions that Xi agreed to the deal, Chinese officials stated they would work towards appropriate outcomes through dialogue, which makes the actual status of the Tiktok situation a bit murky.
Johnston remarked that the disconnect between administrative statements and reality keeps the negotiations alive, suggesting that similar situations may have occurred with past agreements.
