What's Happening?
The United States and China are set to finalize a deal regarding TikTok's U.S. operations, according to Treasury Secretary Scott Bessent. The deal, which has been in the works for some time, involves transferring control of TikTok's U.S. operations to a new
board of directors, with Oracle taking responsibility for security operations. This development follows President Trump's executive order requiring TikTok's owner, ByteDance, to sell the app or face a ban in the U.S. The agreement is expected to be consummated by President Trump and Chinese President Xi Jinping during their meeting in South Korea on Thursday.
Why It's Important?
The TikTok deal is crucial as it addresses national security concerns related to the app's Chinese ownership. By transferring control to American investors, the deal aims to protect U.S. user data and prevent potential influence from the Chinese government. This agreement is a significant step in U.S.-China relations, showcasing cooperation between the two countries despite ongoing trade tensions. The involvement of major American companies like Oracle highlights the strategic importance of securing TikTok's operations under U.S. control, potentially influencing future negotiations with other foreign-owned tech companies.
What's Next?
With the deal set to be finalized, President Trump and Chinese President Xi Jinping are expected to announce the agreement during their meeting in South Korea. The new corporate structure will involve a majority of American investors and a board of directors primarily composed of Americans. ByteDance will retain less than 20% ownership of the new entity. The announcement is likely to prompt reactions from various stakeholders, including lawmakers and industry leaders, who have been closely monitoring the situation. Additionally, the deal may influence future negotiations with other foreign-owned tech companies operating in the U.S.
