A TikTok deal is moving closer. US President Donald Trump and Chinese leader Xi Jinping are expected to discuss terms on Friday.
Negotiators from both countries reached a “framework” agreement this week. Reports suggest TikTok’s American operations could be sold to a group of US investors.
If completed, one analyst described it as a “rare breakthrough” in tense trade relations. It could close a dispute that has dragged on for years.
Experts now examine what the deal means for TikTok’s 170 million American users, and what Beijing gains in return.
The algorithm stays under Chinese control
Chinese state outlets described the outcome as a “win-win”. Trump told reporters, “I’d like to do it for the kids”.
But much remains unresolved. Reports indicate that a US-only TikTok app could launch. A group including Oracle, Andreessen Horowitz and Silver Lake may take control.
The core dispute is TikTok’s algorithm. This system recommends videos and fuels the app’s popularity. Rivals like Instagram Reels and YouTube Shorts tried to copy it but fell short, a former industry executive explained.
“Generally, the one who introduces the technology just knows how to do it better,” the insider said.
TikTok’s parent ByteDance refused to sell the technology, and Beijing supported that stance.
In a surprise move, China’s cybersecurity regulator suggested ByteDance could license the algorithm to a US partner. But full ownership would not change hands.
This marks a clear shift from Beijing’s earlier hardline position.
Still, the US may receive a simplified version of the app, said Kokil Jaidka, a computing expert at the National University of Singapore.
Even limited access could reveal details about how TikTok drives engagement, moderation and advertising.
“It makes no sense for ByteDance to hand over its crown jewel when a lighter version can keep TikTok alive,” Dr Jaidka argued.
Such changes might affect American users. Content may become less diverse compared with other countries.
“A lighter, slower, more domestic version – while ByteDance keeps the crown jewels in Beijing,” she added.
Political hurdles threaten to slow progress
US Treasury Secretary Scott Bessent, who leads Washington’s talks, said TikTok will keep “Chinese characteristics”. That phrase is often used by Beijing to describe its unique approach.
American officials have long questioned who controls TikTok’s data and how the platform shapes US audiences. Such concerns led to a law signed by former president Joe Biden, requiring TikTok to cede control or face a ban.
Trump later reversed his stance, crediting TikTok with boosting youth support in his 2024 campaign.
But lawmakers must still approve any deal. Political resistance is already mounting.
Republican lawmaker John Moolenaar warned the framework might still allow 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 size typically take months or years. Several questions remain unresolved.
How would an American 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 status adds complexity.
And Trump’s unpredictable trade policy could create further complications.
Beijing builds leverage for wider trade talks
Trump has strong reasons to push for a TikTok agreement.
The app reaches one in seven people worldwide. It also acts as a major marketplace, linking users from the US to Europe and Asia.
“This is the only leading social media app not created in America, so it’s very valuable,” the former executive said.
American users bring the most profit. Revenue per US user is five to ten times higher than elsewhere. America may account for nearly half of ByteDance’s income.
Tech site The Information estimated ByteDance’s 2024 revenue at $39bn, with TikTok providing $30bn.
What does China gain?
Licensing protects ByteDance’s algorithm, keeping its most valuable technology in Beijing. This gives China an advantage if the US develops new rivals, said computer scientist Ben Leong.
And TikTok remains in the American market. ByteDance retains its biggest stake, brand and design.
Investor Kevin Xu called this the “TikTok Template”. Other Chinese firms could use the same strategy to expand in America.
Strategic industries like batteries and rare earths may follow.
“This is the formula for companies like BYD or CATL to grow in the US,” Xu explained.
Beijing can present the deal as a success: exporting technology on its own terms. That strengthens its hand in trade negotiations.
Former World Bank director Bert Hofman said, “The Chinese side called the talks in depth, constructive and candid. That shows they are satisfied. The question is when the full deal arrives.”
For Beijing, the arrangement buys time. The US remains a vast export market, while China imports huge amounts of American farm goods. Tariffs damage both.
Export restrictions add pressure, especially rare earths where China dominates.
For now, TikTok looks like progress for China. The US may gain an agreement, but not the decisive victory Trump sought.
“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.”
