A TikTok deal, finally, and what it says about the US-China trade truce

BEIJING – After six years, two presidents and multiple court rulings, the US-China TikTok saga has produced a deal, smoothing the runway ahead of an

expected visit by US President Donald Trump to China

in April.

On Jan 23, TikTok

announced a new joint venture

majority-owned by US companies that will run its US operations, separate from its former Chinese parent company, ByteDance.

ByteDance will retain a 19.9 per cent stake in the entity.

It is the latest sign that a one-year

US-China trade truce

– agreed in October 2025 to bring to a halt a bruising tit-for-tat tariff war – is holding up.

Both countries have largely kept their side of that bargain, struck at a summit between Mr Trump and his Chinese counterpart, Mr Xi Jinping, with Chinese sale of rare earths to US industries having continued and the US having deferred an expansion of its export control rules.

The TikTok deal addresses a longstanding geopolitical and regulatory dispute that has threatened to shut down the popular video app in the US over national security concerns, including how Beijing can potentially access a vast trove of Americans’ personal data collected by the app or influence content moderation and recommendation systems.

However, while the deal ostensibly meets the requirements of US law,

passed under former president Joe Biden in 2024

, questions remain on how much the new ownership would address national security concerns over the app’s ties to Beijing.

ByteDance’s 19.9 per cent stake in the new entity is the maximum allowed under the law, called the Protecting Americans from Foreign Adversary Controlled Applications Act.

But it remains unclear whether the new entity has any operational relationships with ByteDance.

What is almost certain is that the deal was only possible with the blessings of the US and Chinese leaders, whose summit in South Korea in October marked the start of a respite from the two countries’ damaging tariff war.

Writing on Truth Social on Jan 23 after the deal’s announcement, Mr Trump said he was “happy to have helped in saving TikTok”, and thanked Mr Xi for not blocking the deal.

Both leaders have an incentive to preserve some stability in bilateral ties, as they could meet as many as four times in 2026.

Mr Trump is expected to visit Beijing in April, with Mr Xi making a reciprocal visit to the US by the end of the year. Further meetings are possible at the Asia-Pacific Economic Cooperation meeting in Shenzhen and the Group of 20 Summit in Miami.

Beijing has not made any statements on the deal since it was announced, but the Chinese government has long opposed a “forced sale” of TikTok.

In August 2020, Beijing listed “personalised recommendation algorithms”, used by apps like TikTok, as technology that is subject to export restrictions, shortly after Mr Trump in his first term had

ordered sanctions on ByteDance

over its app, for national security reasons.

But in US-China talks in Madrid in September 2025, both countries

reached a “framework agreement”

for TikTok to continue its operations in the US through a restructured ownership model, paving the way for the deal that was finalised on Jan 23.

The new US entity has three managing investors: cloud computing and database software company Oracle, private equity firm Silver Lake Management and Abu Dhabi-based investment company MGX. It will be headed by Mr Adam Presser, who was previously TikTok’s head of operations.

It will be overseen by a board that includes TikTok chief executive Chew Shou Zi,

who is Singaporean

.

The new entity will continue to license the TikTok algorithm from ByteDance but will retrain it using US user data. It will also have authority to moderate content on the app, while Oracle will continue to oversee storage of Americans’ data.

However, Oracle has had troubles with data breaches before, when a major cyberattack in 2025 affected dozens of hospitals whose patients’ data was stored with the company.

Some analysts said Beijing has treated TikTok as a “low-hanging fruit” and a concession it could hold back or deploy selectively to gain leverage in broader trade talks, including over issues such as agricultural imports.

With a trade truce in place reducing the risk of further escalation, China is able to accept the deal without appearing to concede under pressure while framing the outcome as a win, as it keeps TikTok operating in the US market while avoiding an outright forced sale and retaining control over how its technology is transferred abroad.

Since returning to the White House, Mr Trump has

softened his position on TikTok

– he credits the app with drawing the youth vote in his re-election campaign.

TikTok has more than 200 million US users, many of whom use the app for entertainment and news, and for some, their livelihoods.

While it appears that the TikTok issue has been defused as a bilateral flashpoint for now, there could still be further twists to the tale, as

some US lawmakers

have demanded more scrutiny over the deal. The deal’s durability could also hinge on broader US-China ties – the trade truce expires later in 2026, with no certainties over whether the strategic competitors will continue to play nice.