A deal over TikTok is moving closer. US President Donald Trump and Chinese leader Xi Jinping are expected to discuss terms on Friday.
Officials from both sides reached a “framework” agreement this week. Reports suggest 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 dispute that has dominated headlines for years.
Experts now examine what the deal means for TikTok’s 170 million US users, and what Beijing stands to gain.
TikTok’s algorithm remains closely guarded
Chinese state media described the outcome as “win-win”. Trump added, “I’d like to do it for the kids”.
But key details remain unclear. Reports suggest a US-specific TikTok may launch. Oracle, Andreessen Horowitz and Silver Lake may acquire the operations.
The central issue is TikTok’s algorithm. It powers the app by recommending content. Competitors like Instagram Reels and YouTube Shorts tried to replicate it but failed, a former social media executive said.
“Generally, the one who introduces the technology just knows how to do it better,” the insider explained.
ByteDance, TikTok’s Chinese parent, refused to sell the algorithm. Beijing backed the decision.
In a surprising development, China’s cybersecurity regulator suggested ByteDance could license the algorithm to a US operator. Ownership, however, remains in Beijing.
This represents a sharp change from China’s earlier hardline approach.
Still, the US may only get a simplified 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 give away its crown jewel when a lighter version can keep TikTok running,” Dr Jaidka said.
These adjustments may change user experience. Content diversity may shrink for US users.
“A lighter, slower, more domestic version – while ByteDance keeps the crown jewels in Beijing,” she added.
Congressional approval could delay progress
US Treasury Secretary Scott Bessent, leading Washington’s team, said TikTok will keep “Chinese characteristics”. Beijing often uses this phrase to describe its approach.
US officials have long raised concerns over data security and TikTok’s influence on American users. Those fears prompted a law signed by former president Joe Biden, requiring TikTok to hand over 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, and political opposition 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 explained. “A license does not appear to meet that test.”
Cross-border deals of this scale often take months or years. Several questions remain unresolved.
How will US TikTok connect with the global version still run by ByteDance? Will ByteDance’s board approve the plan?
Even with Beijing’s approval, ByteDance’s private ownership complicates matters.
Trump’s unpredictable trade approach could also create further challenges.
Beijing strengthens leverage for broader trade talks
Trump has clear incentives to secure a TikTok deal.
The app reaches one in seven people globally. It also doubles as a marketplace linking buyers and sellers across the US, Europe, and Asia.
“This is the only major social media app not born 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, keeping control in Beijing. This offers an advantage if the US develops rival platforms, said computer scientist Ben Leong.
And TikTok avoids a ban in the US. ByteDance retains its largest stake, branding, and app design.
Investor Kevin Xu described the model as a “TikTok Template”. Other Chinese firms could use it to expand into the US market.
Strategic sectors like batteries and rare earths could follow.
“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. This strengthens Beijing’s negotiating position in 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 farm goods. Tariffs hurt both sides.
Export restrictions also add pressure, particularly on rare earths, where China dominates.
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.”
