The deal requires TikTok’s American assets to be transferred to a new US-based entity, resolving a prolonged dispute over national security concerns. Image: Reuters/Dado Ruvic/Illustration/File Photo

US President Donald Trump has announced an agreement between the United States and China that would allow TikTok to continue operating in the US, according to a recent report by Reuters.

The deal requires TikTok's American assets to be transferred to a new US-based entity, resolving a prolonged dispute over national security concerns.

Under the proposed terms, TikTok's parent company ByteDance would retain a 19.9% stake, while a consortium of US investors - including current shareholders and new backers like Oracle - would hold the remaining 80%. The new US entity will have an American-dominated board, with one member designated by the US government.

The White House has extended the divestiture deadline by 90 days to December 16, allowing more time to finalise the agreement. The deal aims to address concerns that user data could be accessed by the Chinese government, though specific safeguards have not been detailed.

TikTok has consistently denied posing a security risk, noting that US user data is stored domestically with Oracle. The agreement still requires final approval from both governments and may face scrutiny in Congress.