China TikTok deal
Why China may finally be giving up TikTok
When I first heard the announcement last week that TikTok had agreed to sell its American operations (and saw President Trump’s excited post about it), I thought it looked like a win for America — and a major concession from China.
Beijing had fought this for five years, right? Chinese officials routinely denounced U.S. demands to divest as discriminatory.
Then, I talked to my colleague Lily Kuo. Our conversation made me understand that if this was a concession by China at all, it was a concession from a position of strength. TikTok has become a relatively low-value bargaining chip in a much bigger negotiation, Lily explained.
If China does give up TikTok (the terms of the deal are still being finalized), the country is buying itself room to negotiate on the matters it cares about most: tariffs, technology and Taiwan.
You can watch our conversation here:
During his first term, Trump was a leading proponent of banning TikTok in the U.S. Like many, he was concerned that China was using the platform for spying and spreading disinformation. Banning the popular video app, or forcing China to sell TikTok’s U.S. operations, was seen as a matter of national security.
But China refused to give American investors control of the platform and its powerful recommendation algorithm. And so, in the spring of 2024, the U.S. Congress passed a law: ByteDance, the Chinese company that owns TikTok, had to sell the app by a certain deadline or it would be banned.
Then came a plot twist: Trump publicly opposed Congress’s move.
By then, he was campaigning for re-election. TikTok was helping him connect with young voters, and one of his biggest donors, a Wall Street financier, was a major investor in ByteDance.
Since taking office this year, Trump has repeatedly used executive orders to extend TikTok’s deadline. At the same time, he has ramped up a trade war with China, imposing sweeping tariffs on Chinese goods. Unlike many other countries, China has retaliated in kind, imposing its own tariffs and using its chokehold over critical minerals to inflict maximum pain on the U.S. economy.
In recent months, however, the two countries have been in negotiations and have seemed to find common ground. In Beijing’s calculus, the moment to play the TikTok card is now, when China believes it holds maximum leverage.
“It looks like weakness,” Lily said. “But it’s actually a tactical move to focus Trump on the things that China cares most about.”
Trump gets a win on an issue close to his heart — saving the app he credits for helping him win the 2024 election — and China gets to create a positive atmosphere for the two countries to talk about the issues it views as priorities. China wants relief from tariffs. It wants Trump to loosen export controls on advanced chips and to cut back support of Taiwan. It also wants an in-person meeting between Trump and President Xi Jinping, ideally in China, where it can control the optics.
That meeting is now very likely, Lily said. And concessions on some or all of the other issues no longer look impossible.
If all goes to plan, American owners will control TikTok going forward. Trump said yesterday that Fox Corporation, which is controlled by the Murdoch family, could be among the investors involved. That will, perhaps, mitigate a potential national security threat (though some have worried that the specifics of the deal will not go far enough).
The question now is if that will come at the expense of concessions on advanced A.I. technology, or maybe even on Taiwan — issues typically thought of as more important to U.S. national security than an app.
“The Chinese side is fairly optimistic because they see Trump as transactional,” Lily said. “Trump likes a good deal.”
(source: nytimes.com)
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