Friday morning heralded an important phone call between Xi Jinping, China’s President, and Donald Trump. Anticipation had been building; several critical issues were on the agenda such as the persistent trade conflict between their nations, Taiwan’s future, and especially the resolution of the long-standing dispute over TikTok, the China-based social media platform, which temporarily ceased its operations in the U.S. earlier in the year. Doubts about TikTok revolve around its potential harm to the mental health of young users, the promotion of pro-China narratives on its platform, and the potential risk it poses to national security due to the vast amount of data it compiles from its U.S. users. Following the call, in a typically extensive Truth Social post, Trump casually reported that the matter had been given the green light and further communications between him and Xi Jinping were on the cards.
In the concluding stretch of his tenure, President Biden made a legal provision that would force a shutdown on TikTok in the U.S, unless its operations were transferred to a U.S entity before the end of his presidency. This action concluded years of bipartisan suspicion that TikTok, owned by Chinese corporation ByteDance, and its unique algorithm posed a risk to national security. As a response, TikTok took legal action against the government and just before the law was slated to make effect, Supreme Court Justice Brett Kavanaugh opined during oral arguments that the Chinese government might use the collected data to create spies, influence individuals, or even blackmail future key members of various U.S. institutions.
This law was upheld by the court and led to a brief period where TikTok was inaccessible in the U.S for about fourteen hours. But, one of Trump’s initial directives upon his return to the White House on January 20th, with TikTok’s CEO Shou Chew present for his inauguration, was to sign an executive order suspending the ban for seventy-five days. Trump, then, stated his prerogative to either sell TikTok or close it down. Pam Bondi, the Attorney General, sent formal letters to major tech corporations like Google and Apple indicating that the president had the legal right to amend the terms of a law upheld by the Supreme Court and passed by Congress. She stressed that an abrupt shut down would hinder the President’s constitutional duty to protect national security and manage foreign affairs.
The President proceeded to push the pause button on the ban four times more, with the latest instance occurring on September 16th. On this date, Trump informed reporters, ‘We have a deal on TikTok,’ and made it known that several major companies were interested in purchasing the popular social media platform. Following the law that Biden signed, a host of potential interested parties emerged. But one company had a long history with a possible TikTok deal: Oracle.
In the initial Trump Administration, which attempted its own TikTok ban, Oracle played a part in securing a concession that let TikTok keep running in the U.S. As per Project Texas, a partnership deal, Oracle’s servers were selected to host data of TikTok’s American user base. Some doubted the arrangement truly alleviated concerns about national security. Judge Douglas Ginsburg, in a D.C. Circuit Court ruling, expressed uncertainty about whether the solution provided genuine safety.
Upon signing the executive order to push back the ban, Trump appointed Vice-President J. D. Vance as the leader to find a resolution. Most believed this solution would involve attracting more U.S. investors to minimize Chinese shares, ensuring alignment with the regulation for a U.S. owner. Oracle discussed the deal with congressional leaders in March. However, an observer familiar with the negotiations relayed to Politico that the proposal would lead to government reliance on Oracle’s security assurances.
Hopes of Amazon entering the mix with a last-minute bid were dashed when Trump’s stern tariffs on Chinese items ended a potential deal. Mathematical equations were put on hold, as the original order’s expiry was on the brink in the early days of April, and private discussions dragged on. Over the summer, Trump, after postponing the ban for a third time, mentioned to reporters that they had formulated a proposal that would shortly be presented to China.
This month, as the U.S. and China commenced trade talks in Madrid, the Wall Street Journal divulged Beijing’s keenness to host Trump for a state visit, hinting at the Chinese administration’s increased propensity to broker a deal. Scott Bessent, Treasury Secretary, on September 15th, revealed that both sides had agreed to a deal structure that would be validated by Xi and Trump during their phone discussion on Friday. Interestingly, he also downplayed the notion that the app might be used as a vessel for Chinese propaganda.
An understanding is being reached that a new enterprise will be formed where ByteDance will keep less than twenty per cent stake. The rest of the investor group will comprise U.S. corporations, including Oracle, private equity firm Silver Lake, and venture capital firm Andreessen Horowitz. Concerning the algorithm, there seems to be a consensus that it would remain partially the same. An ‘Asia-based investor of Bytedance’ informed the Financial Times that the new U.S. TikTok version would ‘use at least part of the Chinese algorithm but train it in the US on American user data.’
The investor concluded, ‘Beijing’s bottom line is a licensing deal.’ A U.S. consultant quoted in the same article said, ‘after all this, China maintains the algorithm.’ If such an agreement is finalized, it would not only be a victory for Trump’s negotiation abilities but a massive triumph for China. Several years of concern in the U.S. about TikTok’s national security risks might be left largely unresolved. Instead of dealing with these concerns, the agreement’s immediate effect would be to strengthen a rising media conglomerate.
Last year, when Congress passed the TikTok ban, Senator Edward Markey, a Democrat from Massachusetts, was one of the few dissenters. He proposed that the anxieties over TikTok’s national security were exaggerated and that the entire tech industry, not just sections owned by Chinese companies, should be subjected to tougher scrutiny. Sen. Markey stated, ‘TikTok is a serious risk to the privacy and mental well-being of our youngsters.’ However, he was of the opinion that these issues were not unique to TikTok and they were not sufficient reasons for imposing a ban on it.
Markey continued, ‘American companies are engaged in similar practices, too.’ His comment underscored a poignant dichotomy. While some sectors of the social media landscape faced stringent regulations and intense scrutiny under the lens of national security concerns, other sections, notably American ones, did not experience this same level of scrutiny. It called for a wider debate across the industry, rather than focusing on a single app and its country of origin.
The post China and U.S. Settle on TikTok Issue, Announces Trump appeared first on Real News Now.
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