A potential deal over TikTok is moving forward. US President Donald Trump and Chinese leader Xi Jinping are expected to discuss terms on Friday.
Officials from both countries struck a “framework” agreement this week. 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 strained trade ties. It could end a long-running dispute that has dominated headlines for years.
Analysts now weigh what the agreement means for TikTok’s 170 million US users, and what Beijing stands to gain.
The prized algorithm remains protected
Chinese state outlets hailed the outcome as “win-win”. Trump told reporters, “I’d like to do it for the kids”.
But many aspects remain unsettled. Reports indicate a US-only TikTok could emerge. A consortium including Oracle, Andreessen Horowitz and Silver Lake may buy the business.
At the heart of the talks is TikTok’s algorithm. It powers the app’s success by recommending content. Competitors like Instagram Reels and YouTube Shorts tried to match 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.
ByteDance, TikTok’s Chinese parent, refused to give up this technology. Beijing supported the stance.
However, China’s cybersecurity regulator signalled that ByteDance might license the algorithm to a US firm. Ownership, though, would not transfer.
This marks a major shift from Beijing’s earlier tough position.
Still, America may receive a pared-down version of the app, said computing expert Kokil Jaidka from the National University of Singapore.
Even limited access could reveal how TikTok manages engagement, content and advertising.
“It makes no business sense for ByteDance to hand over its most valuable asset when a lighter version can keep TikTok alive,” Dr Jaidka argued.
Such changes may alter the experience for US users. Content could become less diverse than in other regions.
“A lighter, slower, more domestic version – while ByteDance keeps the crown jewels in Beijing,” she added.
Political approval could delay progress
US Treasury Secretary Scott Bessent, leading Washington’s team, said TikTok will retain “Chinese characteristics”. That phrase, often used by Beijing, underlines its influence.
US officials have long voiced concerns about who controls TikTok data and how it shapes American audiences. Those fears drove a law signed by former president Joe Biden. It demanded US control or a ban.
Trump later reversed course, praising TikTok for boosting youth support in his 2024 campaign.
But Congress must still approve any agreement. Political opposition is already mounting.
Republican lawmaker John Moolenaar warned that the framework might leave room for Chinese sway.
“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 size typically take months or years. Questions remain unresolved.
How will an American TikTok connect with the global version still run by ByteDance? Will ByteDance’s board agree to the arrangement?
Even with Beijing’s approval, ByteDance’s private ownership complicates the process.
Trump’s unpredictable approach to trade could also spark new obstacles.
Beijing turns negotiations into leverage
Trump is eager for a TikTok deal, and his reasons are clear.
TikTok serves one in seven people worldwide. It also acts as a global marketplace, linking buyers and sellers across the US, Europe and Asia.
“This is the only major social media app not born in the US, so it’s highly valuable,” the former executive said.
American users deliver the most profit. In the US, revenue per user is five to ten times higher than elsewhere. America may account for nearly half of ByteDance’s total 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 at home. This gives Beijing an edge if the US tries to launch rivals, said computer scientist Ben Leong.
And instead of losing access, TikTok stays in the American market. ByteDance retains its largest stake, design and brand.
Investor Kevin Xu called this approach a “TikTok Template”. Other Chinese firms could use it to expand into the US.
Strategic sectors like 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 outcome as a success: exporting technology under its own conditions. That gives Beijing leverage in future trade talks.
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 arrangement buys time. The US remains a vast export market, while China relies heavily on American farm goods. Tariffs hurt both sides.
Export restrictions add pressure, especially rare earths where China dominates.
For now, TikTok represents progress for Beijing. The US may secure an agreement, but not the sweeping win Trump envisioned.
“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.”
