A TikTok agreement is moving 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 called it a “rare breakthrough” in US-China trade relations. It could resolve a long-standing dispute that has dominated headlines.
Experts are now evaluating what the deal means for TikTok’s 170 million US users, and what Beijing stands to gain.
TikTok’s algorithm stays under Chinese control
Chinese state media described the outcome as “win-win”. Trump commented, “I’d like to do it for the kids”.
Key details remain uncertain. Reports suggest a US-only TikTok app could launch. Oracle, Andreessen Horowitz, and Silver Lake may acquire the operations.
The core issue is TikTok’s algorithm. It recommends videos and drives the app’s popularity. 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 explained.
ByteDance, TikTok’s Chinese parent, refused to sell the algorithm. Beijing supported the stance.
In a surprising move, China’s cybersecurity regulator suggested ByteDance could license the algorithm to a US company. Ownership would remain in Beijing.
This represents a significant change 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, content moderation, and ad targeting.
“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 alter the user experience. Americans might 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 slow the deal
US Treasury Secretary Scott Bessent, leading Washington’s negotiations, said TikTok will retain “Chinese characteristics”. Beijing uses this phrase to highlight its unique approach.
US officials have long raised concerns about TikTok’s data security and influence over American users. Those concerns prompted a law signed by former president Joe Biden, requiring TikTok to surrender US control or face a ban.
Trump later reversed his stance, praising TikTok for energising young voters in his 2024 campaign.
Congress must still approve any deal, and political resistance is growing.
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 would a US TikTok interact with the global version still run by ByteDance? Would ByteDance’s board approve the arrangement?
Even with Beijing’s blessing, ByteDance’s private ownership adds complexity.
Trump’s unpredictable trade approach could also create challenges.
China strengthens leverage and safeguards technology
Trump has clear incentives to pursue a TikTok deal.
The app reaches one in seven people worldwide. It also acts 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.
American users generate the highest profits. Revenue per US 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 American market. ByteDance retains its largest stake, branding, and app design.
Investor Kevin Xu described the approach as a “TikTok Template”. Other Chinese firms could use it to expand into the US.
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 harm both sides.
Export restrictions also create pressure, especially for rare earths where China dominates.
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.”
