A long-awaited agreement over TikTok is drawing 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” deal. Reports suggest TikTok’s US operations could be sold to a group of American investors.
If sealed, one analyst called it a “rare breakthrough” in strained US-China relations. It could also resolve a conflict that has dragged on for years.
Experts now assess what the deal means for TikTok’s 170 million US users, and what China gains in return.
The battle over TikTok’s algorithm
Chinese state media described the outcome as “win-win”. Trump added, “I’d like to do it for the kids”.
But the fine details remain uncertain. Reports suggest a US-only TikTok app could be created. Oracle, Andreessen Horowitz and Silver Lake may be part of the purchase.
At the core of the talks is TikTok’s algorithm. This system powers the app’s virality by suggesting videos. Competitors like Instagram Reels and YouTube Shorts tried to copy it but never matched its success, a former social media executive explained.
“Generally, the one who introduces the technology just knows how to do it better,” the insider said.
ByteDance, TikTok’s Chinese parent, refused to sell the prized code. Beijing backed that refusal.
In a surprising signal, China’s cybersecurity regulator suggested ByteDance could license the algorithm to a US company. But it would never hand over ownership.
This represents a sharp change from Beijing’s earlier strict stance.
Still, the US version may only get a stripped-down app, said Kokil Jaidka, computing expert at the National University of Singapore.
Even limited access could expose how TikTok manages engagement, moderation and advertising.
“It makes no sense for ByteDance to give away its most valuable asset when a lighter version keeps TikTok alive,” Dr Jaidka said.
These changes could reshape the American user experience. Content might appear less varied than in other regions.
“A lighter, slower, more domestic version – while ByteDance keeps the crown jewels in Beijing,” she added.
Lawmakers hold the key to progress
US Treasury Secretary Scott Bessent, who leads Washington’s negotiating team, said TikTok will still carry “Chinese characteristics”. Beijing often uses that phrase to underline its distinct approach.
US officials have long raised alarms about TikTok’s data and its influence on American users. Those concerns drove a law signed by former president Joe Biden, which forced TikTok to surrender control or face a ban.
Trump later reversed his position, crediting TikTok with energising young voters in his 2024 campaign.
But Congress still needs to approve any agreement, and resistance is building.
Republican lawmaker John Moolenaar warned that the framework could still allow 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.”
Large cross-border deals often take months or even years. Major questions remain.
How would a US TikTok interact with the global version still run by ByteDance? Would ByteDance’s board approve the move?
Even with Beijing’s blessing, ByteDance’s private ownership adds hurdles.
Trump’s unpredictable trade policy could also spark fresh complications.
Beijing gains leverage for future trade
Trump has clear incentives to secure a TikTok deal.
The app reaches one in seven people worldwide. It also doubles as a massive marketplace linking buyers and sellers across the globe.
“This is the only major social media app not created in America, so it’s incredibly valuable,” the former executive said.
American users bring the highest profits. Revenue per US user is up to ten times higher than elsewhere. America may generate almost 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. That ensures a strategic edge if the US tries to build rivals, said computer scientist Ben Leong.
And TikTok remains active in America. ByteDance keeps its biggest stake, along with branding and design.
Investor Kevin Xu labelled this a “TikTok Template”. Other Chinese firms could use the same approach to enter the US market.
Sectors such as batteries and rare earths may follow.
“This is the model for companies like BYD or CATL to expand in the US,” Xu said.
Beijing can present the deal as a victory: exporting technology on its terms. That strengthens its hand in wider 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 final deal arrives.”
For Beijing, the arrangement buys time. The US is a crucial export market, while China relies on American agricultural goods. Tariffs hit both sides hard.
Export restrictions also weigh heavily, especially rare earths where China dominates.
For now, TikTok looks like progress for Beijing. 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.”
