US and China Reach Framework Agreement on TikTok; Trump and Xi to Finalize Deal
In a high-stakes drama that has captivated the world, the United States and China have reached a framework agreement
on the future of the popular social media platform TikTok, according to multiple sources. US President Donald Trump and Chinese President Xi Jinping are set to finalize the deal in a phone call on Friday.
Background and Context
Washington had previously demanded that TikTok be sold to a non-Chinese owner by September 17 or face a ban in the United States over national security concerns. These demands came amid strained relations and ongoing trade talks between the two nations. However, Trump has extended the TikTok shutdown deadline for the fourth time, setting the new deadline for December 16.
Key Developments
In the latest round of trade negotiations in Madrid, Spain, a deal was reached on TikTok, a company that Trump identified as young Americans very much wanted to save.
Following the negotiations, Treasury Secretary Scott Bessent announced that Trump and Xi were scheduled to finalize the deal on Friday. The framework agreement
represents an important step in advancing bilateral talks between the world's two largest economies.
According to the New York Post, the deal will establish a $50 billion US-based company. The principal shareholders of the new company will be billionaire Jeff Yass, a Trump supporter, and Bill Ford, head of the investment firm General Atlantic.
Implications and Reactions
Analysts predict that Beijing could potentially leverage the TikTok deal by seeking tariff cuts or relief from hi-tech export controls. However, key details of the deal, including what will happen to the app's valuable recommendation algorithm, remain unclear.
Despite the proposed agreement, critics argue that the deal allows American companies to spend billions for an algorithm ultimately controlled by the Chinese Communist Party. As per The Diplomat, the deal is seen as a 'lose-lose diplomacy'.
Current Status
As the market eagerly awaits the outcome of the anticipated phone call between Trump and Xi, the fate of TikTok hangs in the balance. The social media platform's operations in the United States will be managed by a US consortium that will own 80% of the shares. The revised algorithm will be using Beijing technology, according to La Repubblica.
While this agreement offers a potential solution for TikTok, the platform's future remains uncertain until the deal is finalized. Trump has said, We're pretty close to a deal. We may do an extension with China, but it's an extension based on a deal with TikTok.
Sources: Le Monde, RT, South China Morning Post, BBC News, Deutsche Welle, TASS, The Hindu, La Repubblica, Japan Times, Daily Nation, The Hindu, The Diplomat, New York Times, Clarin, Daily Nation, New York Times.