President Donald Trump has signed an executive order allowing TikTok and its burgeoning e-commerce platform, TikTok Shop, to continue operating in the United States. This decision stems from a framework agreement that limits the Chinese parent company, ByteDance, to a maximum of 20% ownership in the U.S. entity.
The move averts an immediate ban and extends the enforcement deadline, signaling a potential resolution to the ongoing national security concerns surrounding the popular app.
A New U.S. Entity Takes Shape
The executive order establishes a new framework where TikTok's U.S. operations would be majority-owned and controlled by U.S. persons. This would effectively remove control from any foreign adversary, according to a White House press release.
The proposed structure involves an investor consortium, reportedly including Oracle, Silver Lake and Andreesen Horowitz, taking a significant stake in the new U.S. entity. This consortium would oversee the platform's algorithms, code and content moderation decisions. U.S. user data would be stored in a cloud environment managed by an American company.
Extended Deadline and Ongoing Negotiations
This latest executive order grants a further 120-day delay to the ban enforcement, pushing any potential action until January 2026. This is the fourth reprieve for TikTok's U.S. operations, with previous delays extending the original January 2025 deadline.
The negotiations are reportedly intertwined with broader economic and trade discussions between Washington and Beijing. If the deal is finalized, existing U.S. TikTok users may be required to migrate to a new app developed and tested by TikTok.
High Stakes for Retail
The continued operation of TikTok is particularly significant for the retail sector. TikTok Shop has rapidly emerged as a powerful e-commerce channel since its launch just two years ago.
The uncertainty surrounding its future had created considerable apprehension within the retail industry, which has increasingly leveraged the platform for sales and marketing.
