Trump, Xi to sign TikTok US deal on Thursday
What's the story
The US and China have finalized a deal to transfer the American version of TikTok to new owners. The announcement was made by Treasury Secretary Scott Bessent on Sunday. President Donald Trump and Chinese President Xi Jinping will officially "consummate" the deal when they meet in Busan, South Korea, on Thursday. This will be their first in-person meeting since 2019.
Agreement details
Framework for TikTok deal established in Madrid
Bessent revealed that the framework for the TikTok deal was established during discussions in Madrid. He said, "We reached one in Madrid, and I believe that as of today, all the details are ironed out." However, he did not disclose any specifics about the finalized agreement. The deal is part of Trump's executive order last month to facilitate the TikTok transfer transaction.
Ownership structure
ByteDance to own less than 20% of TikTok
Under the framework revealed last month in Trump's executive order, TikTok's parent company ByteDance will own less than 20% of the popular video-sharing platform. "Certain investors" will get 80% of it. This arrangement complies with legislation passed by Congress and signed into law by former President Joe Biden last year. The law mandates that TikTok be divested from its Chinese Communist Party-linked ownership due to US national security concerns.
Management transition
New board to oversee US operations
As per Trump's executive order, TikTok's US operations will be overseen by a new board of directors. This includes Oracle (led by Trump ally Larry Ellison), Fox Corp (owner of Fox News), Andreessen Horowitz (a16z), and Silver Lake Management. The deal has been in the works for months as part of an effort to allay national security concerns over Chinese ownership of the popular app.
Tariff update
Trump likely to withdraw threatened tariffs on China
Bessent also hinted that Trump intends to withdraw the 155% tariff rate he threatened against China last week. The move was a response to Beijing's plans to tighten export controls on its rare earth processing. "It would be an extra 100% from where we are now, and I believe that is effectively off the table," Bessent said. He also teased that "soybean farmers are going to be extremely happy with this deal for this year and for the coming years."