A TikTok deal 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” agreement. Reports suggest TikTok’s US operations could be sold to a group of American investors.
If completed, one expert described it as a “rare breakthrough” in US-China trade relations. It could also resolve a dispute that has dominated headlines for years.
Analysts now assess what the deal means for TikTok’s 170 million US users, and what Beijing could gain in return.
The algorithm remains China’s key asset
Chinese state media hailed the deal as “win-win”. Trump said, “I’d like to do it for the kids”.
Yet many details remain uncertain. Reports suggest a US-specific TikTok app could launch. Oracle, Andreessen Horowitz, and Silver Lake may acquire the operations.
TikTok’s algorithm sits at the centre of negotiations. It 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 explained.
“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 backed that decision.
In a surprising move, China’s cybersecurity regulator indicated ByteDance could license the algorithm to a US firm. Full ownership, however, remains 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 drives 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 US users. Content could appear less diverse than in other regions.
“A lighter, slower, more domestic version – while ByteDance keeps the crown jewels in Beijing,” she added.
Lawmakers could slow progress
US Treasury Secretary Scott Bessent, leading Washington’s team, said TikTok will retain “Chinese characteristics”. Beijing often uses the phrase to signal its unique approach.
US officials have long questioned TikTok’s data security and its influence on American users. These concerns prompted a law signed by former president Joe Biden, requiring TikTok to cede control or face a ban.
Trump later reversed course, crediting TikTok for energising young voters in his 2024 campaign.
Congress must still approve any deal. Political resistance is mounting.
Republican lawmaker John Moolenaar warned the framework could leave room for 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 policy could also create challenges.
China strengthens leverage and protects technology
Trump has clear incentives to push for 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 offers China a strategic edge if the US develops competing apps, said computer scientist Ben Leong.
TikTok remains in the American market. ByteDance retains its largest stake, branding, and design.
Investor Kevin Xu described the strategy as a “TikTok Template”. Other Chinese firms could use it to expand into the US.
Strategic industries like batteries and rare earths may follow the same approach.
“This is the formula for companies like BYD or CATL to grow in America,” Xu explained.
China can present the outcome as a success: exporting technology on 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 weigh heavily, especially rare earths where China dominates supply.
TikTok talks mark progress for China. The US may secure an agreement, but not the decisive win Trump hoped for.
“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.”
