The United States and China have reached a preliminary framework agreement over the ownership and operation of TikTok, U.S. officials say. The deal aims to prevent enforcement of the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA), which could require ByteDance, TikTok’s Chinese parent company, to sell its U.S. operations or face a nationwide ban.

What the framework covers

Treasury Secretary Scott Bessent says the agreement will shift TikTok toward U.S.-controlled ownership while allowing certain “Chinese characteristics” to remain, such as licensing arrangements for TikTok’s recommendation algorithm.

Recent reports suggest the new U.S. entity would be 80% owned by American investors, with ByteDance keeping a minority stake of just under 20%. The U.S. version of TikTok would have an American-dominated board, potentially including a government-appointed member and Oracle would continue hosting U.S. user data on its servers in Texas.

However, the licensing of TikTok’s algorithm remains a sticking point. Lawmakers warn that even indirect Chinese influence could violate the intent of PAFACA, which Congress passed in 2024 to require full divestment or discontinuation of foreign-controlled applications.

Deadlines, delays and ongoing negotiations

Originally, TikTok faced a divestment deadline of Jan. 19, 2025, but enforcement has been delayed multiple times by President Donald Trump. The current deadline is Dec. 16, 2025, giving negotiators time to finalize terms without forcing TikTok offline.

On Sept. 19, Trump said he and Chinese President Xi Jinping made “progress” on a call meant to finalize the deal, but admitted it “hasn’t been fully negotiated” yet. The two leaders plan to meet at the APEC Summit in South Korea this fall, with Trump visiting China in early 2026 and Xi visiting the U.S. at a later date.

Some lawmakers, particularly those focused on national security, remain unconvinced the framework will satisfy PAFACA’s requirements. They argue any deal must ensure full U.S. control over the algorithm and user data to prevent potential influence from China.

Legal analysts also warn that if the final agreement falls short of the law’s demands, it could face judicial challenges or be struck down in court.

What comes next

Several key points still need to be resolved before the deal can be finalized. Negotiators must determine how much control, if any, ByteDance will retain through algorithm licensing rights, as well as what oversight mechanisms will be put in place to monitor security, data access and governance. They also need to settle the final ownership terms, including the exact stake U.S. investors will hold and who will sit on the board.

Until those details are worked out, TikTok’s future in the U.S. remains uncertain. The coming months will decide whether the agreement satisfies Congress, the courts and national security officials, or whether TikTok faces a ban if the Dec. 16 deadline arrives without a final deal.