In a surprising turn of events that could reshape U.S.-China tech relations, Treasury Secretary Scott Bessent announced on Sunday that President Donald Trump and Chinese leader Xi Jinping are poised to finalize a long-anticipated deal allowing TikTok to continue operating in the United States. The agreement, which has been in negotiation for months, is expected to be “consummated” during their meeting in South Korea on Thursday, according to statements Bessent made on CBS’s “Face the Nation.” This development comes amid heightened trade tensions, including recent tariff threats, and marks a potential thaw in bilateral relations over data security and national interests.

The deal stems from concerns over TikTok’s Chinese parent company, ByteDance, and its handling of American user data. U.S. officials have long argued that the app poses national security risks due to potential data access by the Chinese government. Under the proposed framework, TikTok’s U.S. operations would likely involve partnerships with American firms to ensure data is stored domestically and oversight is enhanced, though specific details remain sparse. Bessent emphasized that the accord represents a “final deal,” but he refrained from elaborating on the exact terms, leaving industry observers to speculate on the concessions made by both sides.

Path to Negotiation Breakthrough

Efforts to resolve the TikTok impasse have intensified since President Trump signed an executive order earlier this year, mandating ByteDance to divest its U.S. assets or face a ban. Sources familiar with the talks, as reported by The Information, indicate that high-level diplomacy between Washington and Beijing accelerated in recent weeks, with Bessent playing a pivotal role in bridging gaps. The Treasury Department’s involvement underscores the economic stakes, as TikTok boasts over 100 million U.S. users and significant advertising revenue.

Parallel to the TikTok discussions, Bessent noted a broader tariff truce. Trump’s earlier threat of 100% tariffs on Chinese goods appears “effectively off the table,” per the secretary’s comments, in exchange for China deferring tightened controls on rare earth mineral exports and resuming substantial purchases of U.S. soybeans. This quid pro quo, detailed in coverage from Livemint, highlights how the app’s fate is intertwined with larger trade dynamics, potentially averting a broader economic confrontation.

Implications for Tech and Trade

For tech industry insiders, this deal signals a pragmatic shift in U.S. policy toward Chinese apps, balancing security concerns with the realities of global digital economies. Analysts point out that allowing TikTok to operate under U.S.-supervised conditions could set a precedent for other platforms like WeChat, which have faced similar scrutiny. However, critics argue that any agreement must include robust auditing mechanisms to prevent data leaks, a point echoed in reports from UPI.

The timing of the announcement, just days before the leaders’ summit, suggests strategic positioning. Bessent’s optimism was further bolstered by confirmations in The New York Times, where he described the pact as a culmination of months of framework discussions. Yet, uncertainties linger: Will ByteDance retain partial ownership? How will content moderation evolve under potential U.S. oversight? These questions could influence investor confidence in tech stocks tied to social media.

Broader Geopolitical Context

As Trump prepares for his Asia tour, the TikTok resolution could bolster his administration’s narrative of tough but effective negotiation with China. According to Business Insider, Bessent expects “major progress” on trade fronts during the meeting, including deferred actions on critical materials. This comes against a backdrop of escalating U.S. export controls on semiconductors, which have strained relations further.

Industry executives are watching closely, as the deal’s structure might inspire similar arrangements for other foreign-owned apps. While Bessent offered few specifics, his assurance of a finalized agreement, as noted in Newsweek, points to a diplomatic win. Still, enforcement will be key; any perceived lapses could reignite congressional calls for stricter bans. For now, the impending Trump-Xi handshake in South Korea represents a tentative bridge in the ongoing tech cold war, with ripple effects likely to unfold in the coming months.