A TikTok deal is moving closer. US President Donald Trump and Chinese leader Xi Jinping are scheduled to discuss terms on Friday.
Officials from both sides recently agreed on a “framework” deal. Reports suggest TikTok’s US operations could be sold to a group of American investors.
If finalised, 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 examine what the deal means for TikTok’s 170 million American users, and what Beijing stands to gain.
TikTok’s algorithm remains Beijing’s strongest asset
Chinese state media hailed the talks as “win-win”. Trump added, “I’d like to do it for the kids”.
Yet many details remain unsettled. Reports indicate a US-only TikTok app could emerge. Oracle, Andreessen Horowitz, and Silver Lake may acquire the operations.
The algorithm lies at the heart of negotiations. It recommends content 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 backed that decision.
In a surprising move, China’s cybersecurity regulator suggested ByteDance could license the technology to a US firm. Ownership, however, remains in Beijing.
This represents a major shift from Beijing’s previous hardline approach.
Still, the US version may only get a stripped-down app, said Kokil Jaidka, computing expert at the National University of Singapore.
Even partial 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 American users. Content may appear less diverse than in other regions.
“A lighter, slower, more domestic version – while ByteDance keeps the crown jewels in Beijing,” she added.
Political approval may delay the deal
US Treasury Secretary Scott Bessent, leading Washington’s team, said TikTok will retain “Chinese characteristics”. Beijing often uses that phrase to highlight its unique approach.
US officials have long raised concerns about TikTok’s data security and its influence over American users. Those concerns drove a law signed by former president Joe Biden, requiring TikTok to cede US control or face a ban.
Trump later reversed course, crediting TikTok for energising young voters in his 2024 campaign.
But Congress must still approve any agreement. Political opposition is already building.
Republican lawmaker John Moolenaar warned that the framework might 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 magnitude 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 blessing, ByteDance’s private ownership adds complications.
Trump’s unpredictable trade approach could also create further challenges.
China gains leverage while preserving control
Trump has clear reasons to pursue a TikTok deal.
The app reaches one in seven people worldwide. It also serves as a marketplace linking 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 lets ByteDance protect its algorithm while keeping control in Beijing. This gives China a strategic advantage if the US develops rival apps, said computer scientist Ben Leong.
And TikTok remains in the American market. ByteDance retains its largest stake, branding, and design.
Investor Kevin Xu called this approach a “TikTok Template”. Other Chinese firms could adopt it to expand in the US market.
Strategic sectors such as 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 hand in broader trade negotiations.
Former World Bank director Bert Hofman noted, “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 agreement 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 on rare earths where China dominates supply.
For now, TikTok talks represent 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.”
