Madrid, Spain - The US and China have agreed a "framework" to resolve their dispute over TikTok, as a deadline looms this week for the Chinese-owned app to be sold or face a US ban.

In a Truth Social post, President Donald Trump said that a deal was reached with a "certain company that young people in our Country very much wanted to save. They will be very happy!"

He added that he would speak to Chinese President Xi Jinping on Friday.

Treasury Secretary Scott Bessent announced the agreement after a second day of talks with Chinese Vice Premier He Lifeng in Madrid, which also includes discussions about the wider US-China trade dispute.

TikTok Bessent gives update on TikTok deal with China amid trade talks

"We have a framework for a TikTok deal," Bessent told reporters, confirming that Trump and Xi will speak on Friday to "complete" the agreement.

TikTok is owned by China-based internet company ByteDance.

A federal law requiring TikTok's sale or ban on national security grounds was due to take effect the day before Trump's inauguration on January 20.

In mid-June Trump extended a deadline for the app by another 90 days to find a non-Chinese buyer or be banned in the US. That extension is due to expire on Wednesday.

The talks in Madrid also cover Trump's threat of steep tariffs on Chinese imports.

In his Truth Social post on Monday, Trump said the meeting in Europe "has gone VERY WELL!" and added: "The relationship remains a very strong one!!!"

Trade tensions escalated sharply earlier this year, with tit-for-tat tariffs reaching triple digits and snarling supply chains.

Both governments later agreed to lower their punitive tariffs, with the US imposing 30% duties on imports of Chinese goods and China hitting US products with a 10% levy, but that temporary and uneasy truce expires in November.

Top diplomats and defense chiefs from both nations held back-to-back phone calls last week, which analysts said could mark a step towards a meeting between Trump and Xi.

Trump said in August he expects to visit China this year or shortly afterward, noting that economic ties between the two countries have improved.