In a significant development for the global technology sector, TikTok has finalized a deal to establish a new U.S.-based entity, a move that could ease longstanding tensions between the video-sharing app’s Chinese parent company and American regulators. According to a report titled “TikTok Finalises Deal to Form New US Entity, Trump Thanks Xi Jinping” published by StartupNews.fyi, the agreement has drawn an unusual public show of approval from former President Donald Trump, who praised Chinese President Xi Jinping in a statement.
Details of the arrangement remain limited, but sources close to the negotiations confirm that the new U.S. entity will operate with a degree of autonomy, including distinct corporate governance and data oversight tailored to U.S. regulatory expectations. The entity is expected to assume responsibility for safeguarding American user data, a central concern that has fueled years of scrutiny from Washington over potential national security risks posed by TikTok’s ties to China.
The deal comes amid a broader geopolitical backdrop of escalating tensions between the United States and China, particularly in the realms of technology and digital infrastructure. Lawmakers have repeatedly expressed concern that China’s National Intelligence Law could compel TikTok’s parent company, ByteDance, to hand over user data to Chinese authorities. While ByteDance has consistently denied such claims, the company faced increasing pressure to divest its U.S. operations or face a potential ban.
This agreement marks a turning point in the saga that began during Trump’s presidency, when his administration ordered TikTok to divest its U.S. assets or cease operations in the country. Although subsequent legal challenges stalled the order, the conversation around data sovereignty, cross-border tech operations, and foreign influence continued into the Biden administration and beyond. The formation of a U.S.-based corporate arm appears to be ByteDance’s latest strategy for addressing these enduring concerns without a full divestiture.
The StartupNews.fyi report also highlights a striking moment of diplomacy. In an unexpected twist, Trump publicly thanked President Xi for what he described as “constructive engagement” in the deal. This statement reflects a departure from the often combative rhetoric that characterized his administration’s approach to China but may signal a more pragmatic tone in light of evolving macroeconomic dynamics and shifting geopolitical priorities.
Although the resolution appears to offer a path forward for TikTok’s operations in the U.S., observers remain cautious. Technology policy experts and privacy advocates are likely to scrutinize the governance structure of the new entity, particularly its independence from ByteDance and the safeguards it establishes for data protection. It remains to be seen whether this restructuring will satisfy lawmakers who have called for stricter oversight of foreign-owned technology platforms or those who continue to advocate for a full sale of TikTok’s U.S. operations.
As the finer details of the agreement come to light, the TikTok case may emerge as a precedent in how governments and multinational technology companies negotiate the balance between innovation, national security, and user privacy in an increasingly fragmented digital world.
