Trump approves TikTok deal to prevent US ban

Trump Signs Executive Order on TikTok

On Thursday, President Trump signed an executive order that greenlights a contract to keep TikTok operational in the US, following several months of uncertainty regarding the future of the popular Chinese-owned social media app.

TikTok is set to reorganize itself under a new US entity to comply with the 2024 law necessitating the sale of its China-based parent company, or else face a ban in the US.

This move comes nine months after the law was enacted, though Trump has consistently postponed its enforcement, hoping to finalize an agreement that would allow the app to continue operating in America.

Administrative officials recently unveiled that the US now has a framework for handling such transactions, following trade discussions with China. Trump mentioned on Friday that Chinese President Xi Jinping has given his approval for the deal. Yet, the specifics regarding Beijing’s stance remain somewhat uncertain.

“I had a very good talk with President Xi,” Trump remarked in the Oval Office on Thursday.

“I have a lot of respect for him, and I hope he feels the same. We discussed TikTok and various other topics, but TikTok was a big part of our conversation.”

As part of the agreement, a consortium of US investors, including Oracle and Silver Lake, will take a majority stake in the newly formed TikTok entity, with the contract expected to limit stock ownership to under 20% to meet regulatory requirements.

Vice President Vance mentioned that the company’s valuation is around $14 billion.

In addition to acquiring stakes, Oracle will also enhance TikTok’s security measures and oversee the management and retraining of algorithms related to US user data.

How lawmakers will react to the specifics of this transaction is still unclear, as there are concerns on how the algorithms and other operational elements will align with the mandate to sever ties with the parent company in China.

The law mandating this separation received broad bipartisan support when it passed Congress in April 2024, fueled by increasing worries over national security and the implications of data privacy in relation to China.

“Our main goal is to keep TikTok running while ensuring the protection of American data privacy as stipulated by the law,” the administration emphasized.

Initially, Trump had sought to outright ban TikTok during his first term, but his stance shifted during the 2024 campaign, where he appeared to downplay previous national security concerns, highlighting the app’s popularity among younger Americans.