A deal over TikTok may be close. US President Donald Trump and Chinese leader Xi Jinping plan to discuss terms on Friday.
Officials from both sides reached a “framework” agreement this week. Reports say TikTok’s US operations may be sold to American firms.
If the deal succeeds, one expert called it a “rare breakthrough” in US-China trade talks. It could end a dispute that has dominated headlines for years.
Experts now discuss what such a deal means for TikTok’s 170 million US users, and what Beijing gains in return.
The US may not get TikTok’s secret sauce
Chinese state media described the deal as “win-win”. Trump said, “I’d like to do it for the kids”.
But much remains uncertain. Reports suggest a US-specific version of TikTok may emerge. A consortium including Oracle, Andreessen Horowitz, and Silver Lake could buy the operations. Some firms contacted by reporters declined to comment.
The key issue is TikTok’s algorithm, the formula that recommends content. It drives the app’s popularity. Instagram and YouTube created rival features, but they never matched TikTok’s system, a former executive said.
“Generally, the one who introduces the technology just knows how to do it better,” the insider explained.
ByteDance, TikTok’s parent, refused to part with its algorithm. Beijing supported this stance.
Yet China’s top cybersecurity regulator surprised observers by signalling ByteDance may license the algorithm. The ownership, however, will not be transferred.
This marks a major shift from Beijing’s earlier hardline approach.
Still, the US version may operate on a “stripped-down” app, said computing expert Kokil Jaidka from the National University of Singapore.
Even limited access could reveal secrets about engagement, moderation and ad targeting. These drive profitability.
“It makes no business sense for ByteDance to hand over its most valuable asset when a lighter version can keep TikTok running,” Dr Jaidka said.
Such changes could alter user experience. Content variety may shrink compared with other regions.
“A lighter, slower, more domestic version – while ByteDance keeps the crown jewels in Beijing,” she added.
The deal may take longer than expected
US Treasury Secretary Scott Bessent, who leads talks, said TikTok will retain “Chinese characteristics”. That phrase, often used by the Communist Party, highlights differences in approach.
US officials have long raised concerns about data access and influence over American users. These fears drove legislation signed by former president Joe Biden. It demanded TikTok’s US control or a ban.
Trump later reversed his stance, crediting TikTok for boosting young voter support in his 2024 win.
Still, lawmakers must approve any sale. Political backlash has already emerged in Washington.
Republican John Moolenaar warned the framework may still allow Chinese influence.
“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 deals often take months or years. Unresolved questions remain.
How will US TikTok interact with the rest of ByteDance’s app? Will ByteDance’s board approve the deal?
Even with Beijing’s approval, ByteDance’s status as a private firm complicates matters.
And Trump’s unpredictable approach to trade could spark new problems.
Beijing buys time and leverage
Trump wants a TikTok deal, and the reasons are clear.
TikTok counts one in seven people worldwide as users. It also works as a massive marketplace, from the US to Germany, Indonesia to the Philippines.
“This is the only major social media app not born in the US, so it’s very valuable,” the former executive said.
American users generate more revenue than elsewhere. In the US, per-user income is five to ten times higher. America likely makes up nearly half of ByteDance’s total revenue.
Tech outlet The Information estimated ByteDance earned $39bn globally in 2024. TikTok contributed about $30bn.
The question remains: what does China gain?
Licensing allows ByteDance to keep its algorithm hidden. This strengthens China if the US tries to develop competing apps, said scientist Ben Leong.
And instead of a ban, TikTok stays in the US. ByteDance keeps the largest stake, brand, and format.
Investor and tech expert Kevin Xu called this a “TikTok Template”. Other Chinese firms could use similar models to enter the US market.
Technologies vital to competitiveness, like batteries or rare earths, may flow more easily through such structures.
“This is the formula for firms like BYD or CATL to expand in America,” Xu explained.
China can frame this as a win: exporting technology on its own terms. This gives Beijing leverage in trade talks.
Former World Bank director Bert Hofman noted, “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 Beijing time. The US is a major export market for China. In return, China imports vast amounts of US agriculture. High tariffs hurt both.
Export controls remain, especially on rare earths, where China holds a near monopoly.
A breakthrough on TikTok looks like progress for China. The US may get a deal, but not the victory 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.”
