A deal over TikTok may be near. US President Donald Trump and Chinese leader Xi Jinping will discuss terms on Friday.
Officials from both nations reached a “framework” agreement this week. Reports suggest TikTok’s US operations could be sold to American firms.
If it succeeds, one expert called it a “rare breakthrough” in US-China trade relations. It could close a dispute that has dominated headlines for years.
Observers now debate what the deal means for TikTok’s 170 million US users and what Beijing gains in return.
Washington may not unlock TikTok’s algorithm
Chinese state media labelled the talks a “win-win”. Trump said, “I’d like to do it for the kids”.
Still, many details remain unclear. Reports suggest a US-specific version of TikTok could emerge. A consortium including Oracle, Andreessen Horowitz and Silver Lake may buy operations.
The key issue is the algorithm, the system that recommends videos. It drives TikTok’s popularity. Rivals like Instagram Reels and YouTube Shorts tried to copy it, but failed to match its success, a former social media executive explained.
“Generally, the one who introduces the technology just knows how to do it better,” the insider said.
ByteDance, TikTok’s parent, refused to give up its prized algorithm. Beijing supported this decision.
Yet China’s top cybersecurity regulator surprised many by suggesting ByteDance may license the algorithm to a US operator. The ownership, however, will remain in China.
This marks a sharp change from Beijing’s previous hardline stance.
But the US version may still operate on a “stripped-down” app, said computing expert Kokil Jaidka of the National University of Singapore.
Even limited access could show how the system drives engagement, moderation and advertising.
“It makes no business sense for ByteDance to hand over its most valuable asset when a lighter version can keep TikTok running,” Dr Jaidka argued.
These adjustments could affect user experience. Content variety may narrow compared with global versions.
“A lighter, slower, more domestic version – while ByteDance keeps the crown jewels in Beijing,” she added.
Approval process could drag on
US Treasury Secretary Scott Bessent, leading the negotiations, said TikTok would keep “Chinese characteristics”. That phrase, often used by the Communist Party, underlines Beijing’s approach.
US officials have long raised concerns about data security and influence over American users. These worries led to legislation signed by former president Joe Biden. It demanded US control over TikTok or a ban.
Trump later shifted position, crediting TikTok with boosting youth support in his 2024 victory.
Yet lawmakers still must approve any sale. Political pushback already grows in Washington.
Republican John Moolenaar warned the framework may allow Chinese influence to linger.
“Put simply: the statute requires full separation from ‘foreign adversary’ control,” lawyer Hdeel Abdelhady noted. “A license does not appear to meet that test.”
Large transactions often take months or years. Several issues remain unresolved.
How would US TikTok interact with global TikTok, still owned by ByteDance? Would ByteDance’s board approve the sale?
Even with Beijing’s approval, ByteDance’s private ownership complicates matters.
Trump’s unpredictable stance on trade could also bring new obstacles.
Beijing strengthens its position
Trump wants a TikTok deal, and the reasons are obvious.
TikTok serves one in seven people worldwide. It also functions as a huge marketplace, linking buyers and sellers from the US to Germany, Indonesia and the Philippines.
“This is the only major social media app not born in the US, so it’s highly valuable,” the former executive said.
American users generate far more income. In the US, per-user revenue is five to ten times higher. America likely accounts for nearly half of ByteDance’s revenue.
Tech outlet The Information estimated ByteDance’s global revenue at $39bn in 2024, with TikTok contributing $30bn.
But what does China gain?
Licensing allows ByteDance to keep its algorithm secret. This strengthens China if the US develops rival apps, said scientist Ben Leong.
Instead of a ban, TikTok stays in America. ByteDance retains its largest stake, brand and format.
Investor and tech analyst Kevin Xu described this as a “TikTok Template”. Other Chinese firms could use the same approach to enter the US.
Key technologies, from batteries to rare earths, may follow this model.
“This is the formula for companies like BYD or CATL to expand in America,” Xu said.
China can present this as a victory: exporting technology on its terms. It gives Beijing leverage in trade talks with Washington.
Former World Bank director Bert Hofman explained, “The Chinese side called the talks in depth, constructive and candid. That shows they are satisfied. The question is when a full deal arrives.”
A TikTok deal could buy China time. The US remains a vast export market for Beijing, while China imports large amounts of US farm goods. Tariffs harm both economies.
Export controls add more tension, especially over rare earths, where China dominates supply.
For now, TikTok represents progress for Beijing. The US may get a deal, but not the triumph 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 rely on borrowed code, firewalled data, and fragile political trust.”
