President Donald Trump is set to finalize one of the most consequential technology agreements of his presidency - the sale of TikTok's U.S. operations - during a summit with Chinese President Xi Jinping in Busan, South Korea. The deal, confirmed by Treasury Secretary Scott Bessent, will give American investors majority control of the platform, marking a rare moment of cooperation in a year defined by economic rivalry between Washington and Beijing.
Under the agreement, ByteDance Ltd., TikTok's Chinese parent company, will retain less than 20% ownership of the U.S. division, while the remaining shares will be held by U.S. investors. Bessent said the agreement was reached in Madrid and would be "consummated" when Trump and Xi meet in Busan later this week. While he declined to disclose commercial details such as valuation, Bessent confirmed the deal satisfies Washington's demand for domestic control of the app's U.S. operations.
The deal concludes months of negotiations that began after Trump signed the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA) in 2024. The law required foreign-owned social media platforms deemed national security risks to divest or face a nationwide ban, with TikTok emerging as the most high-profile target.
Officials in both countries say the TikTok agreement represents a turning point in the broader U.S.-China relationship. Chinese negotiators reportedly reached a consensus in Beijing before the announcement, signaling President Xi's willingness to ease tensions and prevent further escalation of the trade dispute. Busan was chosen as neutral territory for the leaders' meeting and will serve as the venue for the signing and a joint statement focused on technology and trade cooperation.
For Trump, the agreement offers both political and economic gains. U.S. officials confirmed that the negotiations helped avert a threatened 100% tariff on Chinese imports - a move that economists warned could have worsened inflation - while also paving the way for Beijing to resume purchases of American soybeans and pause its restrictions on rare-earth mineral exports vital to U.S. manufacturers.
Analysts say the arrangement allows Trump to present himself as a strategic dealmaker, turning a national security showdown into a broader trade victory. The outcome also relieves pressure on American businesses caught in previous tariff crossfire, particularly in agriculture and high-tech sectors.
For TikTok, the restructuring ensures compliance with U.S. law and brings data governance and storage under American jurisdiction. The agreement addresses long-standing concerns over Chinese government access to U.S. user data but leaves unresolved a critical question - whether ByteDance will be permitted to transfer TikTok's core algorithm as part of the transaction.
Markets reacted favorably to the breakthrough, with investors viewing it as a step toward stabilizing U.S.-China economic relations after a year of escalating tariffs and export controls. Technology and agricultural stocks rose following Bessent's announcement, reflecting optimism about renewed trade flows.
