The threat of letting TikTok actually go dark is what finally brought China to the negotiating table, according to Treasury Secretary Scott Bessent. With President Trump and Xi Jinping set to finalize the deal Friday, the administration's hardline stance appears to have cracked what seemed like an impossible deadlock over the app's future.
The standoff that's dominated Washington and Silicon Valley for months just took a dramatic turn. Treasury Secretary Scott Bessent revealed Tuesday that President Trump's explicit willingness to let TikTok go completely dark is what finally motivated China to engage seriously in deal talks.
"President Trump made it clear that he would have been willing to let TikTok go dark, that we were not going to give up national security in favor of the deal," Bessent told CNBC's Squawk Box. That ultimatum, he says, "turned the tide" after months of stalled negotiations.
The revelation comes as ByteDance stares down a September 17 deadline to divest its US operations or potentially face a complete shutdown. But unlike previous extensions that felt routine, this time feels different. Trump and Chinese President Xi Jinping are expected to speak Friday to finalize what both sides are calling a breakthrough framework.
Behind the scenes, the deal's been ready for months. Bessent disclosed that commercial terms between ByteDance and new investors were "essentially done" back in March or April. What changed everything was Trump's massive tariff announcement on April 2 - that's when China put the entire TikTok deal on ice, according to the Treasury Secretary.
The timing reveals the broader chess game at play. Trump's trade threats and chip restrictions have steadily ratcheted up pressure on Beijing, but the TikTok deal could mark a turning point between the world's two largest economies. "We were able to reach a series of agreements, mostly for things we will not be doing in the future that have no effect on our national security," Bessent explained.
Oracle is emerging as the likely centerpiece of any deal structure. CBS News reported Monday that the cloud giant is among "multiple companies" in talks, building on its existing role in TikTok's web infrastructure. The arrangement would have Oracle handling data collection and software updates while a consortium of outside investors takes operational control.
Trump has publicly backed both Oracle Chairman Larry Ellison and CEO as potential buyers, though the final structure appears more complex than a simple acquisition. The White House is reportedly assembling a deal with Oracle and outside investors that would satisfy both national security concerns and ByteDance's financial interests.
