A TikTok deal is drawing closer. US President Donald Trump and Chinese leader Xi Jinping are expected to discuss terms on Friday.
Officials from both sides recently reached a “framework” deal. Reports indicate TikTok’s US operations could be sold to American investors.
If finalised, one analyst described it as a “rare breakthrough” in US-China trade relations. It could settle a long-standing dispute that has dominated headlines for years.
Experts are analyzing what the deal means for TikTok’s 170 million US users and what Beijing could gain.
TikTok’s algorithm stays under Chinese control
Chinese state media called the talks “win-win”. Trump added, “I’d like to do it for the kids”.
Key details remain unclear. Reports suggest a US-specific TikTok app could launch. Oracle, Andreessen Horowitz, and Silver Lake may acquire the operations.
TikTok’s algorithm drives the app’s success by recommending content. Competitors like Instagram Reels and YouTube Shorts attempted similar features but failed, a former social media executive said.
“Generally, the one who introduces the technology just knows how to do it better,” the source said.
ByteDance, TikTok’s Chinese parent, refused to sell the algorithm. Beijing supported that stance.
In a surprising move, China’s cybersecurity regulator suggested ByteDance could license the algorithm to a US company. Full ownership would remain in Beijing.
This marks a sharp shift from China’s previous hardline approach.
Still, the US version may only receive a stripped-down app, said Kokil Jaidka, computing expert at the National University of Singapore.
Even limited access could reveal how TikTok manages engagement, moderates content, and targets ads.
“It makes no sense for ByteDance to hand over its most valuable asset when a lighter version keeps TikTok running,” Dr Jaidka said.
These adjustments may affect the user experience. Americans could see less diverse content than users elsewhere.
“A lighter, slower, more domestic version – while ByteDance keeps the crown jewels in Beijing,” she added.
Congressional approval could delay the deal
US Treasury Secretary Scott Bessent, leading Washington’s team, said TikTok will retain “Chinese characteristics”. Beijing uses this phrase to highlight its approach.
US officials have long raised concerns about TikTok’s data security and influence on American users. These concerns prompted a law signed by former president Joe Biden, requiring TikTok to surrender control or face a ban.
Trump later reversed his stance, crediting TikTok for energising young voters in his 2024 campaign.
Congress must still approve any deal, and political resistance is mounting.
Republican lawmaker John Moolenaar warned the framework could allow Chinese influence.
“Put simply: the statute requires full separation from ‘foreign adversary’ control,” lawyer Hdeel Abdelhady said. “A license does not appear to meet that test.”
Deals of this scale often take months or years. Several questions remain unresolved.
How will US TikTok interact with the global version still run by ByteDance? Will ByteDance’s board approve the arrangement?
Even with Beijing’s approval, ByteDance’s private ownership adds complexity.
Trump’s unpredictable trade approach could also create challenges.
China strengthens leverage while safeguarding technology
Trump has clear incentives to pursue a TikTok deal.
The app reaches one in seven people worldwide. It also serves as a marketplace connecting buyers and sellers across the US, Europe, and Asia.
“This is the only major social media app not created in America, so it’s extremely valuable,” the former executive said.
US users generate the highest profits. Revenue per American user is five to ten times higher than elsewhere. America may account for nearly half of ByteDance’s revenue.
Tech outlet The Information estimated ByteDance’s 2024 revenue at $39bn, with TikTok contributing $30bn.
What does China gain?
Licensing protects ByteDance’s algorithm while keeping control in Beijing. This gives China an advantage if the US develops rival apps, said computer scientist Ben Leong.
TikTok also remains in the US market. ByteDance retains its largest stake, branding, and app design.
Investor Kevin Xu described the approach as a “TikTok Template”. Other Chinese firms could adopt it to expand into the US market.
Strategic industries like batteries and rare earths may follow.
“This is the formula for companies like BYD or CATL to grow in America,” Xu explained.
China can present the deal as a success: exporting technology under its own terms. That strengthens Beijing’s position in broader trade talks.
Former World Bank director Bert Hofman said, “The Chinese side called the talks in depth, constructive and candid. That shows they are pleased. The question is when a full deal arrives.”
For Beijing, the arrangement buys time. The US is a major export market, while China relies heavily on American agricultural goods. Tariffs hurt both sides.
Export restrictions also create pressure, especially on rare earths where China dominates supply.
TikTok talks mark progress for China. The US may secure a deal, but not the decisive win Trump expected.
“The deal might work on paper, but it will always sit under a cloud,” Dr Jaidka warned.
“A US TikTok may look the same, but it will run on borrowed code, firewalled data, and fragile political trust.”
