Why It Took Years to Resolve the U.S.-China TikTok Deal

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The multiyear effort by the United States to force Chinese company ByteDance to sell TikTok represents a true geopolitical drama of the digital age.

Why did it take so long to get a deal? The answer involves three powerful and often conflicting forces.

America’s security worries: The U.S. government is concerned that because TikTok is owned by a Chinese company, China’s government could potentially access Americans’ personal data or use the app to influence what people see and think.

China wants to protect its tech success: China sees TikTok as one of its biggest tech victories worldwide. Chinese leaders don’t want to be forced to give up control of their most successful global app just because another country demands it.

TikTok is everywhere in America: Millions of Americans use TikTok daily, and many businesses depend on it to reach customers. This means that simply banning the app would upset voters and hurt the economy, making it a tough political move.

These three competing interests – America’s security concerns, China’s national pride, and TikTok’s popularity with Americans – created a complex situation where no simple solution would work for everyone involved.

Timeline: From Acquisition to Framework Agreement

The conflict didn’t emerge overnight but evolved through distinct phases, each shaped by different political actors, legal strategies, and geopolitical pressures.

Early Origins (2017-2019)

The TikTok story in America began with a purchase. In 2017, Beijing-based technology giant ByteDance, founded by Zhang Yiming in 2012, acquired a U.S. video app named Musical.ly for $1 billion.

The following year, ByteDance integrated Musical.ly’s user base and features into its own international short-form video app, TikTok, which had launched in 2017 as a global counterpart to its domestic Chinese version, Douyin. This move catalyzed TikTok’s explosive growth in the American market.

For more than a year, this transaction went largely unnoticed by U.S. regulators. However, by late 2019, as TikTok surpassed 1 billion global downloads, alarm bells began ringing in Washington.

The Committee on Foreign Investment in the United States (CFIUS), a powerful inter-agency body tasked with reviewing foreign acquisitions for national security risks, launched a retroactive review of the Musical.ly purchase.

Because the 2017 deal hadn’t been voluntarily submitted for review, CFIUS was empowered to investigate it years after the fact and recommend that the President unwind the transaction.

Trump Administration’s First Move (2020)

The regulatory review boiled over in summer 2020. Amid the COVID-19 pandemic, President Donald Trump began publicly framing TikTok as a national security threat, suggesting a ban could punish China for the coronavirus outbreak.

On August 6, 2020, he took decisive action, issuing Executive Order 13942. Invoking the International Emergency Economic Powers Act (IEEPA), the order declared a national emergency and sought to prohibit all transactions with ByteDance within 45 days, effectively setting a deadline for the company to sell TikTok’s U.S. operations.

This move triggered a frantic scramble for a deal. Microsoft emerged as an early suitor, exploring a purchase of TikTok’s services in the U.S., Canada, Australia, and New Zealand. ByteDance ultimately selected a partnership with the American tech company Oracle as its preferred path forward.

The Trump administration followed up with another order on August 14, formally directing ByteDance to divest its U.S. assets within 90 days.

Legal Challenges and Political Shift (2020-2021)

Trump’s aggressive executive actions soon hit a formidable obstacle: the U.S. legal system. TikTok and a group of its creators filed lawsuits arguing the ban violated constitutional free speech and due process rights.

Federal judges proved sympathetic. In September and December 2020, Judge Carl J. Nichols of the U.S. District Court for the District of Columbia issued preliminary injunctions, blocking the Trump administration’s ban from taking effect. The court found the administration’s actions likely exceeded its authority under IEEPA and constituted arbitrary infringement on the free flow of “informational materials.”

The legal stalemate was soon overtaken by political change. Following his inauguration in January 2021, President Joe Biden paused the legal cases to conduct his own review.

In June 2021, the Biden administration formally rescinded Trump’s executive orders. Instead of a company-specific ban, Biden directed the Department of Commerce to establish a broader, criteria-based framework for evaluating security threats posed by all foreign-owned software applications. This signaled a shift from Trump’s impulsive, executive-driven approach to a more methodical, legally grounded strategy.

Legislative Turn (2022-2024)

While the immediate threat of a ban receded, bipartisan concern in Washington continued mounting. The new consensus held that TikTok posed a unique threat requiring a specific legislative solution.

This sentiment first materialized in the “No TikTok on Government Devices Act,” which President Biden signed into law in December 2022, barring the app from all federal devices. This federal ban followed similar actions by dozens of U.S. states.

The legislative push culminated in April 2024 with passage of the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA). Passed with overwhelming bipartisan support, the law was a direct response to the legal failures of Trump’s 2020 executive orders.

The law gave ByteDance a clear ultimatum: sell TikTok to a non-Chinese owner within 270 days (by January 19, 2025) or face a complete ban from U.S. app stores and web hosting services.

Final Showdown (2024-2025)

Facing a legally sound and congressionally mandated deadline, ByteDance and TikTok once again turned to the courts, filing a lawsuit in May 2024 arguing PAFACA was unconstitutional.

This time, however, the legal system sided with the government. In December 2024, a federal appeals court upheld the law. On January 17, 2025 – just two days before the deadline – the U.S. Supreme Court unanimously affirmed the lower court’s decision, ruling that the government’s national security concerns outweighed free speech considerations.

With all legal avenues exhausted, TikTok complied with the law. On January 18, 2025, the app ceased operations in the United States, leaving its 170 million users with a message that a law banning the app had been enacted. The shutdown, however, proved remarkably brief.

Trump 2.0 and Extensions (2025)

The day the ban took effect, January 19, 2025, was the day before Donald Trump’s second inauguration. Having previously championed a ban, Trump had reversed his position during the 2024 campaign, embracing the app and crediting it with helping him reach younger voters.

True to his new stance, then-President-Elect Trump posted on Truth Social promising to extend the deadline and work toward a deal.

Just hours after shutting down, TikTok announced it would reinstate service, citing Trump’s assurances. On his first day in office, January 20, President Trump signed an executive order delaying the ban’s enforcement for 75 days.

This move, criticized by legal experts as potential overreach of executive authority against a congressional statute, provided critical breathing room for renewed negotiations. This initial delay was followed by a series of further extensions: another 75-day extension on April 5, a 90-day extension on June 17, and a fourth extension on September 16, pushing the final deadline to December 16, 2025.

This period of rolling deadlines allowed high-level talks between U.S. and Chinese officials to progress, culminating in the announcement of a potential “framework agreement” in September 2025. The deal remains a work in progress after their conversation.

U.S. Case Against TikTok

The U.S. government’s multiyear campaign against TikTok has been consistently based on core national security arguments that achieved rare bipartisan consensus in deeply divided Washington. These concerns focus not on the app’s content – the dancing videos, comedy skits, or viral challenges – but on its ownership structure and potential for exploitation by the Chinese government.

The case against TikTok rests on two primary pillars: fear of mass data collection and threat of covert content manipulation.

Data Exploitation Concerns

The foundational concern driving U.S. policy is the relationship between TikTok’s parent company, ByteDance, and the Chinese Communist Party (CCP). U.S. officials argue that China’s 2017 National Intelligence Law, which compels all Chinese organizations and citizens to “support, assist, and cooperate with national intelligence efforts,” effectively makes ByteDance an instrument of the state.

The fear is that Beijing could secretly demand access to the vast trove of data TikTok collects on American users. This data includes not only user-generated content but also sensitive personal information, location data, biometric identifiers, and browsing history.

In the hands of a foreign adversary, this information could be used to build detailed dossiers on American citizens, track movements of federal employees and contractors, conduct corporate espionage, or identify individuals for blackmail and intelligence recruitment.

TikTok has long attempted to mitigate these fears. The company has repeatedly stated that data from U.S. users is stored physically in the United States (on servers managed by Oracle) and backed up in Singapore, not in China.

However, the company acknowledged in a 2022 letter to U.S. senators that China-based employees could still access American user data under certain circumstances. For U.S. security officials, this admission confirmed their worst fears: A physical firewall is meaningless if a legal and operational backdoor remains open to Beijing.

Algorithmic Control Threat

The second major threat identified by U.S. officials is potential for the CCP to manipulate TikTok’s powerful recommendation algorithm. This “For You” feed is the core of the TikTok experience, serving a seemingly endless stream of content tailored to each user’s inferred interests.

The concern is that this powerful engagement tool could be weaponized for propaganda and influence operations. U.S. lawmakers have warned that Beijing could direct ByteDance to covertly tweak the algorithm to serve several strategic goals.

This could include censoring content the CCP deems politically sensitive, such as discussions of the 1989 Tiananmen Square massacre, protests in Hong Kong, or China’s treatment of its Uyghur minority.

TikTok could be used to push certain stories or false information that helps China’s government. This would influence what millions of Americans think about politics and current events, without them realizing they’re being influenced.

In other words, people might think they’re just watching regular videos, but the content could actually be carefully chosen to change their opinions in ways that benefit China.

The U.S. Justice Department has pointed to TikTok’s internal practice of “heating” – artificially promoting certain videos to achieve a target number of views – as a pre-existing mechanism that could be exploited for malicious purposes.

CFIUS and the Original Investigation

The administrative and legal foundation for the U.S. government’s actions was laid by CFIUS. The committee’s decision in late 2019 to retroactively review ByteDance’s 2017 acquisition of Musical.ly was the pivotal first step.

Historically, CFIUS focused on foreign acquisitions in sectors with clear military or intelligence connections, but its mandate has expanded to include transactions involving large amounts of sensitive personal data.

In August 2020, CFIUS concluded its review and, in a unanimous recommendation to the President, called for ByteDance to divest its U.S. assets. This finding provided the Trump administration with formal justification to issue its divestment order, framing TikTok’s very presence in the U.S. market as the result of an unvetted transaction that posed ongoing national security threats.

The core of the U.S. government’s position is that these risks are inherent to ByteDance’s ownership and cannot be mitigated through promises or partial measures. This creates a fundamental impasse that has been central to the prolonged dispute.

The U.S. case is built on potential for harm; it legislates against a future threat lawmakers deem catastrophic and unacceptable. In contrast, ByteDance has consistently argued in legal challenges that the U.S. government has never presented concrete public evidence of the CCP actually accessing U.S. user data or manipulating the algorithm for political ends.

China’s Red Line: Algorithm and Technological Sovereignty

While Washington framed the TikTok issue as a national security matter, Beijing viewed it as a direct assault on its technological ambitions and national sovereignty. The Chinese government’s resistance to a forced sale has been the single greatest obstacle to quick resolution, transforming what could have been a corporate transaction into a high-stakes geopolitical standoff.

Resisting Forced Sale

From the beginning, China’s government said that the U.S. demand to sell TikTok was really just a political attack meant to hurt a successful Chinese tech company.

In other words, China claimed the U.S. wasn’t actually worried about security – they just wanted to damage TikTok because it was Chinese and doing well. Official statements and state media commentaries consistently described the U.S. position as “unilateral bullying” and “robbers’ logic.”

Beijing argues the United States is weaponizing an overly broad definition of national security to suppress a foreign competitor that has succeeded where American tech giants have failed: creating a truly global social media platform.

Chinese trade officials have warned the U.S. against the “politicization” of economic issues and demanded Washington stop its “suppression” of Chinese companies.

Algorithm as National Treasure

The most critical sticking point in the entire negotiation has been the fate of TikTok’s recommendation algorithm. This complex system of code, which powers the app’s famously addictive “For You” feed, is considered not only ByteDance’s most valuable intellectual property but also a strategic national asset by the Chinese government.

In August 2020, just weeks after President Trump issued his first executive order, China’s Ministry of Commerce and Ministry of Science and Technology took a decisive step. They updated the country’s list of technologies subject to export controls to include “personalized information recommendation services based on data analysis.”

This was no coincidence; it was a direct and strategic countermove to U.S. pressure. The initial American demand was for a straightforward sale of TikTok’s U.S. operations, which would have included its technology.

By classifying the algorithm as a restricted technology, Beijing effectively nationalized it. This legal maneuver meant ByteDance could no longer sell or transfer its core algorithm to a foreign entity without first obtaining an export license from the Chinese government – a license Beijing made clear it had no intention of granting.

Veto Power and Shift to Licensing

This single act fundamentally changed the nature of negotiations and is arguably the primary reason a deal has taken so long to materialize. It gave the Chinese government a legal veto over any potential sale, transforming the process from a negotiation between a company (ByteDance) and a potential buyer (like Microsoft or Oracle) into a state-to-state diplomatic confrontation between Washington and Beijing.

With a full sale of the algorithm off the table, the only viable path forward became a complex licensing agreement. Under this model, the new U.S.-based TikTok entity would not own the algorithm outright. Instead, it would “rent” the intellectual property from ByteDance, which would retain ultimate ownership.

This solution allows China to achieve its goal of protecting what it views as a core technological asset. But this solution creates exactly the kind of connection between the U.S. company and its former Chinese owner that the new law was meant to prevent. This sets up years of complicated negotiations to try to solve this legal puzzle.

In other words, they’re trying to find a way to keep TikTok running in the U.S. while also following a law that was designed to cut all ties with Chinese companies, which is nearly impossible to do.

Political Pendulum: Washington’s Evolving Approach

The prolonged nature of the TikTok saga cannot be understood without analyzing dramatic shifts in political strategy within the United States. The journey from 2020 to 2025 has been characterized by a search for a legally and politically viable tool to address the perceived threat, with each new approach bringing its own challenges and delays.

Trump 1.0: Executive Order Gambit

President Trump’s first attack on TikTok in 2020 showed his typical style of taking quick, solo action. He used emergency economic powers to try to skip Congress and force TikTok to sell quickly using just his presidential authority. Instead of working with Congress to pass new laws, Trump used existing emergency powers to try to force TikTok out immediately on his own.

This strategy was aggressive and generated significant headlines, but it was built on a shaky legal foundation. Federal courts ultimately concluded that the administration had not provided sufficient evidence to justify such a sweeping measure under IEEPA, especially given the First Amendment implications of banning a major communications platform.

The failure of this executive order gambit consumed the better part of a year and ended in legal stalemate, demonstrating the limits of presidential power in the face of judicial review.

Biden Administration: Legalistic Approach

Learning directly from the legal defeats of its predecessor, the Biden administration adopted a fundamentally different strategy. After formally rescinding Trump’s orders in June 2021, the administration embarked on a more patient and methodical path aimed at building a legally unassailable case.

This involved working closely with a bipartisan coalition in Congress to craft new legislation specifically tailored to the TikTok problem. The result was the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA).

Unlike Trump’s broad use of emergency powers, PAFACA was a targeted statute that laid out a clear, Congressionally-approved process for divestment or ban. This legislative approach, while taking years to come to fruition, proved far more durable.

Its ability to withstand every legal challenge, culminating in a unanimous endorsement from the Supreme Court, was complete validation of the Biden administration’s strategy to build a solution on firm statutory foundation rather than executive power alone.

Trump 2.0: The 180-Degree Turn

The most startling shift in the entire saga came with Donald Trump’s return to the presidency in 2025. Having been the first president to try to ban the app, he now cast himself as its savior.

This dramatic reversal was driven by a combination of political and economic calculations. Trump and his campaign came to believe that his active presence on TikTok was a key factor in winning over younger voters in the 2024 election. Furthermore, he expressed reluctance to see the app’s significant economic value “thrown out the window” through an outright ban.

This new perspective led to direct clash between the executive and legislative branches. On his first day in office, President Trump used his executive authority to delay enforcement of the PAFACA ban that Congress had passed and the Supreme Court had upheld.

His administration argued it was using prosecutorial discretion to allow time for a “political resolution,” but critics and legal experts contended he was unlawfully suspending a statute passed by Congress.

Even though it was legal, Trump kept extending the deadline throughout 2025, which basically ignored what the law was supposed to accomplish. But this gave time for the complicated, high-level talks between countries that had been stuck before.

Trump used his presidential power to keep pushing back the deadline, which went against the spirit of the law but allowed important diplomatic negotiations to finally move forward.

Each of these distinct phases – the failed executive orders, the successful legislative push, and the controversial executive delays – contributed years to the overall timeline, making the search for a solution a reflection of the U.S. political system’s own internal struggles and transformations.

Inside the Deal: “Project Texas” Structure

After years of threats, lawsuits, and political reversals, the solution that has emerged is an unprecedented and highly complex technopolitical experiment.

Known broadly as “Project Texas,” the potential framework agreement negotiated in 2025 is not a simple sale but an intricate corporate and technical structure designed to navigate the conflicting demands of U.S. national security and Chinese technological sovereignty.

New U.S. Entity and Ownership

At the heart of the proposed deal is creation of a new, independent U.S. company that will assume control of TikTok’s American operations. To comply with the PAFACA law, this new entity will be majority-owned by American investors.

Reports suggest a consortium of U.S. firms, led by tech giant Oracle and including private equity firm Silver Lake and venture capital firm Andreessen Horowitz, would acquire a controlling stake of approximately 80%.

Crucially, ByteDance’s ownership in this new U.S. entity would be reduced to just under 20%. This specific threshold is designed to satisfy the legal requirement in PAFACA that caps ownership by any company from a “foreign adversary” country at 20%.

To ensure American control, the board of directors for the new company would also be U.S.-dominated, with six of the seven seats held by Americans. One of these board members would be a government-designated appointee tasked specifically with overseeing national security compliance.

Oracle’s Central Role as Technological Guardian

Oracle, a company with deep ties to the U.S. government and a long-standing relationship with the Trump administration, is positioned as the technological linchpin of the entire arrangement. Its responsibilities under the expanded “Project Texas” are comprehensive and designed to create a secure bubble around TikTok’s U.S. operations:

Data Hosting: Oracle will continue its existing role of storing all data from U.S. TikTok users on its domestic cloud servers, primarily in Texas. This is intended to create a physical barrier preventing data from being stored in or easily accessed from China.

Code Review and Security: Oracle will be tasked with continuously reviewing and monitoring TikTok’s source code and application development. This oversight is meant to detect any potential security vulnerabilities, backdoors, or malicious features that could be used to compromise user data or devices.

Algorithm Control: This is the most critical and controversial aspect of Oracle’s role. Because China has forbidden the sale of the algorithm, the deal relies on a licensing agreement. Under the proposed framework, Oracle will take the licensed version of the algorithm from ByteDance and be responsible for rebuilding, retraining, and operating it entirely within the United States.

According to the White House, Oracle will “continuously monitor the U.S. algorithm to ensure content is free from improper manipulation or surveillance.” The goal is to sever any operational link that would allow ByteDance or Beijing to influence the content Americans see.

Unresolved Questions and Lingering Risks

Despite the detailed framework, significant questions and risks remain, which have contributed to negotiation delays. Critics in Congress and the national security community argue that the licensing arrangement still constitutes an “operational relationship” with ByteDance, which could violate the plain text of the PAFACA law.

The technical feasibility of completely insulating a complex, constantly evolving algorithm from its original creator is also a matter of intense debate.

The need to invent this novel, hybrid solution is a direct result of the failure of simpler options. An outright sale was blocked by China’s export control law, and an outright ban was deemed politically and economically too costly in the U.S.

Negotiators were therefore forced to create an entirely new model for partitioning a global technology platform along national lines. The immense difficulty of defining the precise terms of this untested structure – from the legal nuances of the licensing agreement to the technical protocols for Oracle’s oversight – is a core reason why the “deal” has been a moving target for years.

Impact on 170 Million Americans

The prolonged battle over TikTok’s future is not merely an abstract geopolitical chess match. It has tangible, high-stakes consequences for the 170 million Americans who use the app. The platform’s deep integration into the U.S. economy and culture created a powerful domestic counterforce to the national security arguments for a ban, compelling policymakers to seek a compromise, however long it might take.

Small Business Lifeline

For a significant and growing segment of the American economy, TikTok has become an indispensable tool. More than 7 million U.S. small businesses rely on the platform for marketing, customer engagement, and direct sales.

A 2023 study by Oxford Economics, cited by TikTok, found that the platform’s ecosystem contributed $24.2 billion to the U.S. GDP.

Unlike traditional advertising on platforms like Instagram or YouTube, which can be expensive and highly competitive, TikTok’s algorithm offers small businesses the potential for massive organic reach at low cost. A single viral video can launch a brand or sell out a product overnight.

The threat of a ban has been a source of immense anxiety for these entrepreneurs. In a court filing, TikTok estimated that a one-month shutdown would cost U.S. small businesses more than $1.3 billion in lost revenue.

This significant economic footprint has served as a powerful argument against an outright ban, forcing lawmakers to consider the real-world damage such a move would inflict.

Creator Economy Impact

Beyond established businesses, a ban would devastate the livelihoods of millions of American content creators who have built careers on the platform. For many, being a TikTok influencer is a full-time job, generating income through brand sponsorships, affiliate marketing via the TikTok Shop, and the platform’s own monetization features.

The potential ban has highlighted the precariousness of the creator economy, where careers can be built and destroyed by shifting policies of a single company or, in this case, government actions.

The disruption would not only eliminate a primary source of income but also fracture the vibrant creative communities that have flourished on the app.

Cultural Phenomenon

With nearly half the U.S. population on the app, TikTok has become a central force in American popular culture. It dictates trends in music, fashion, and even language, serving as a digital town square for a generation.

The prospect of banning such a deeply embedded cultural institution carries enormous political risk. This reality was not lost on President Trump, whose dramatic shift from wanting to ban the app to wanting to “save” it was explicitly tied to his belief that it was a vital tool for communicating with younger voters. While some members of Congress saw TikTok as a clear threat, the White House had to consider that banning it would definitely cause public anger and hurt the economy.

TikTok became so big and beloved that even if it was a security risk, getting rid of it would create major political and economic problems that presidents had to worry about.

This political balancing act made the “ban” portion of the “divest or ban” law a highly undesirable outcome, forcing the government to repeatedly extend deadlines and engage in protracted negotiations to achieve the “divest” option, no matter how complex or time-consuming it proved to be.

Global Perspective: How U.S. Allies Handle TikTok

The aggressive “divest-or-ban” approach pursued by the United States is a significant global outlier. Examining the regulatory strategies of its closest allies, particularly in Europe, reveals a fundamentally different philosophy for managing risks associated with foreign-owned technology platforms.

Government Device Bans

The most widely adopted policy among U.S. allies has been to prohibit TikTok use on government-issued devices. This measure has been implemented by the United Kingdom, Canada, Australia, and central institutions of the European Union, including the European Commission and NATO.

This strategy is a targeted security measure designed to protect sensitive government data and networks from potential espionage. However, it doesn’t ban TikTok on people’s personal phones nationwide. This shows they believe the risks to regular Americans can be handled in other ways besides forcing TikTok to be sold.

European Union’s Regulatory Model

The European Union has embarked on a far more comprehensive but fundamentally different path through its landmark Digital Services Act (DSA). The DSA is not a law aimed at a single company or country; rather, it establishes broad rules governing the behavior of all “Very Large Online Platforms” (VLOPs) that operate within the EU, a category that includes TikTok, Meta, Google, and others.

Under the DSA, these platforms are subject to stringent obligations designed to increase transparency and user safety. They must provide detailed, searchable repositories of all advertisements run on their platforms, explain the main parameters of their recommendation algorithms, and offer users an option for a content feed that is not based on profiling.

The EU is actively enforcing these rules. In February 2024, the European Commission opened formal proceedings against TikTok to assess potential breaches of the DSA related to addictive design, protections for minors, and advertising transparency.

The Commission has already issued preliminary findings that TikTok’s ad repository is not compliant with the law.

Philosophical Divide: Ownership vs. Behavior

This comparison reveals a core philosophical divergence in how the world’s two largest Western regulatory powers approach digital age challenges.

The U.S. strategy, as codified in PAFACA, defines the problem as one of ownership. It posits that control of a major media platform by a company based in a “foreign adversary” nation is an inherent and unacceptable national security risk, regardless of the company’s specific actions. The only remedy, therefore, is to sever that ownership link through divestiture.

In contrast, Europe focuses on what platforms actually do, not where they come from. European laws don’t care if a platform is Chinese, American, or from anywhere else. Instead, they create rules that all big platforms must follow to make sure they operate fairly, openly, and safely in Europe.

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