The Journal. - Is the TikTok Saga Finally Over?

Episode Date: September 17, 2025

After a series of extended deadlines, the U.S. and China say they have a framework for a deal for the future of TikTok. Alex Leary discusses who comes out ahead.  Further Listening:  - Wait… Was That the TikTok Ban? - The Day the Music Died on TikTok Sign up for WSJ’s free What’s News newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Earlier this week, officials from the U.S. and China flew to Madrid for yet another round of trade negotiations. For two days, the delegations hold up in a 17th century palace, discussing terms about everything from soybean imports to tariffs. But one issue quickly emerged as a focal point, TikTok. For months, TikTok's U.S. presence has been hanging on the edge of survival. as the U.S. and China negotiated over the app's ownership. And as the two sides met in Madrid, they faced a pressing deadline. Unless they could agree on a way to sell TikTok to a U.S. owner by today, September 17th, the app would go dark for its 170 million U.S. users.

It's a potentially make or break moment for TikTok. Today was the day that the last Trump extension expired, so it would have forced essentially the shutdown of the end up. app. But at the last minute, they kind of emerge from these meetings and said, we have a framework of a deal. That's our colleague Alex Leary, who covers politics. Now, the key word there is framework. That does not mean a deal. It means a framework, sort of the outlines of a deal. So one big caution here is that a lot of this is still being worked out. What did it take to get to this framework that we're at? A lot of private talks and back.

room discussions, essentially high level. This is high stakes. So it's taken a lot of sort of behind the scenes wrangling among the Trump administration and leading business figures and companies. So what's in this proposed deal? And who comes out ahead? Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Wednesday, September 17th. Coming up on the show, inside the 11th hour proposal to save TikTok in the U.S. This episode is brought to you by Nespresso Professional, designed to create meaningful moments of connection at work. Nespresso Professional delivers exceptional coffee every time.

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might be in a new town altogether. That's the powerful backing of Amex. Terms and conditions apply. Learn more at amex.ca.ca slash y-Amex. For years now, TikTok has been a target for politicians and policymakers on both sides of the aisle. That's because TikTok's parent company, bite dance, is a Chinese company. Yeah, the U.S. has wanted to address national security concerns for years over TikTok, concerns whether China was monitoring users or potentially forcing or promoting what the U.S. calls propaganda through the platform to sway minds on a range of issues or to monitor movements, et cetera. Lawmakers have been sounding the alarm for years.

Here's the problem with TikTok as it exists now. It is owned by a Chinese parent company that has direct ties to the Chinese Communist Party. I'm very concerned about TikTok taking all the private information that Americans put out to them. We got a Trojan horse living inside our country. At the heart of the concerns was TikTok's powerful algorithm. It's what gets users so hooked on the app. That is what makes TikTok TikTok. It's so powerful and effective.

And so the concern is that the algorithm can be tweaked or adjusted to, you know, to promote certain views or to highlight certain political points or simply to manipulate users and how they're thinking or digesting information. So that's a very powerful tool. TikTok's parent company bite dance has long pushed back on the idea that the app is a security threat. It's said it doesn't share data with the Chinese government and that its U.S. operations are firewalled off from Beijing.

At first, Trump agreed with the national security concerns. In 2020, during his first term, he even tried to ban TikTok. We're looking at TikTok. We may be banning TikTok. We may be doing some other things. One alternative that had been thrown around for years was to get an American company to buy the app. Plenty of suitors had lined up.

At one point, Walmart wanted a piece. Microsoft explored a takeover. Even Kevin O'Leary, the guy from TV's Shark Tank, wanted in. None of it panned out. In April 2024, under then-President Joe Biden, Congress gave the app a deadline. Either find a way to put TikTok under American ownership or the app would be banned in the U.S. By that time, Trump was back on the campaign trail, running for re-election. And he started to change his tune on TikTok.

The youth vote is coming into view, and his advisors are kind of telling him, look, you should get on board with this. This is a widely popular, especially among younger voters who could be persuaded to, you know, get behind you. And you could save this app. You could be the savior. And you could also, you know, harness a very potent political force. And so he was convinced of that. So I like TikTok. A number of people were advocating for that, including his young son, Baron Trump,

who is currently 19 years old and really tapped into the sort of TikTok movement. Can you talk about the day Trump launched his TikTok account? I was actually at, it was a UFC event in Newark, New Jersey. You were there? I was there. So Trump was at this event in Newark, New Jersey in June 2024. So he enters, you know, the arena. to just rapturous applause.

And right before he did that, Trump had released his first TikTok video, which was a video of him and UFC chief Dana White, who's a very popular figure himself. The president is now on TikTok. It's my honor. Once Trump won the election,

he started looking for ways to keep TikTok around. January 19th, 2025, was the deadline to either sell or ban the app. And the day before, on January 18th, the app went dark for 14 hours. This message appearing on screens, saying a law banning TikTok has been enacted in the U.S. Unfortunately, that means you can't use TikTok for now. We are fortunate that President Trump has indicated he will work with us on a solution. With Trump about to take office, TikTok came back online and kept running in the U.S.

In the months that followed, trade tensions between the U.S. and China and the U.S. escalated, with the administration going back and forth with Beijing over things like tariffs and fentanyl. And during those talks, TikTok became a bargaining chip. Both sides want to make a deal on larger issues. TikTok is tangled up in the sort of trade wars that Trump reignited. And this is a major leverage point for China, that it knows how popular the app is in the U.S. and how much Trump has been a convert to singing its praises and seeing its value, so they're not going to be eager to give it up without getting something in return. Along the way, Trump extended the deadline to ban TikTok to September 17th, today,

which brings us back to Madrid. We have a framework for a TikTok deal. The two leaders, President Trump and party chair, she will speak on Friday to complete the deal, but we do have a framework. That's after the break. Did you lock the front door? Close the garage door? Yep.

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I guess you could call it like a framework for a deal. The framework, as we understand it, we've reported, would generally give about 80% of U.S. control of a new sort of U.S.-based TikTok. The idea is there would be one version of TikTok still controlled and operated by ByteDance, and another version of the app would be operated by a new U.S. entity. And that control would be underwent.

U.S. investors. Those investors include Oracle, Silver Lake, and a number of other companies that would be involved, including Sesquahana, which is already sort of an investor in ByteDance, KKR, General Lanark, or other names that are said to be involved in this partnership consortium that would take 80% control of the U.S. TikTok. Now, the 20% would remain under Chinese control. I mean, 80% stake, new version of TikTok, this sounds like a pretty big deal. It is a big deal. It's a massive, obviously very lucrative potentially for these companies, Oracle in particular, which already does business with TikTok. So it's a massive transaction if they can pull it off.

The U.S. government would also get to choose someone to sit on the board of this new TikTok subsidiary. They will be able to name someone, essentially say this is the U.S. government's recommendation for a board member. So it's essentially saying we're going to have more of a say here in choosing who sits on the board. This week, a senior and White House official said, quote, any details of the TikTok framework are pure speculation unless they're announced by this administration. Under this new framework, existing TikTok users in the U.S. would be asked to shift to a new app, which TikTok has built and is testing, according to the journal's reporting.

So that's what the U.S. would get. And for China, one of the biggest prizes would be a symbolic one. Beijing has been pushing for a state visit from Trump. China has extended an invitation to President Trump to visit. President Xi would love to have President Trump on Chinese soil. It's a sign of she's power and standing in the world on the global stage. So that would be a big coup for him. President Trump has said he will, but he hasn't also committed to when that will happen.

So there's sort of a little bit of a jousting going on, but the White House said it's serious about looking to make that happen. And then there's the core issue, the thing underpinning all of these negotiations, the algorithm. In this deal, China would. get to keep it. The deal includes some sort of licensing from bite dance to this new U.S. TikTok, which is probably still going to be controversial because it's not completely detached from Chinese control. That probably won't satisfy a lot of critics out there who say that, you know,

that still raises concerns about what happens to user data. Right. Because a licensing agreement doesn't quite work in the same way as getting ownership over something. something like an algorithm, right? That's correct. It's like leasing a car, essentially. I mean, you're still, you have it near control, but it's not yours ultimately. Would this new version of TikTok potentially resolve the concerns around national security? That's the hope. I mean, that would be the expectation. That's certainly how they will sell it, that this is sort of a good compromise. But it's hard to imagine that it will completely alleviate concerns that a number of lawmakers still have about TikTok and national security concerns given that, you know, Beijing

is still going to have a hand on things through its, you know, the way it operates with businesses and in that country. So I think the debate will continue. TikTok will survive, but the debate over its value and its security will persist. After the administration announced the new framework, Trump again pushed back the deadline for a TikTok ban to December 16th. The new date gives both sides more time to hammer out all the details of an agreement. The Treasury Secretary says the deal will be confirmed by Trump and she after a call on Friday.

So does this framework mean that TikTok won't be banned in the U.S. anymore, like that prospect is off the table now? It's getting there. It's getting to being off the table. I just, it's hard to fathom that the Trump administration will let TikTok. wither on its watch, given how much Trump is, you know, staked, you know, he has shifted 180 degrees on the thing. And, you know, it's just hard to imagine him suddenly abandoning that in the tens of millions of people that are looking to him to save it. What does this tell us, Alex, about TikTok in politics today, like how important it's become?

it's essential it's absolutely essential both parties know it the law that called for the sale or the ban of ticot was was widely bipartisan and yet you've got lawmakers on both sides of the aisle embracing ticot and of course other forms of social media on the one hand there's you know yes we need to address these concerns on the other it's like we can't give this up this is too powerful a tool to reach voters, especially young ones who are sometimes elusive in politics. That's all for today, Wednesday, September 17th. The Journal is a co-production of Spotify and the Wall Street Journal. Additional reporting in this episode from Rebecca Fung, Raphael Huang, Amrith Ramkumar, and Lingling Wei. Thanks for listening. See you tomorrow.