The United States and China are engaged in a set of negotiations that are coming to a decisive moment. This moment is particularly pivotal for the future of the extremely popular social media platform TikTok. The talks come nearly nine months after a negotiated ban on the China-based app was first slated to take effect. That ban was first delayed until earlier this year. With relations between the two countries cooling, TikTok’s fate hangs in the balance. The approval of its algorithm by Chinese authorities and potential changes in U.S. China trade policy will be key to determining its fate.
Former President Donald Trump previously announced a deal to allow TikTok to come under the control of a group of U.S. investors. This settlement marks a critical step toward redressing the many harms of the platform. It represents a consequential move in the direction of making sure that TikTok is run by Americans. Vice President J.D. Vanc emphasized the importance of this move, stating that the agreement would bring the algorithm “under the control of American investors.”
Especially in terms of the broader trade negotiations between the U.S. and China, this is one of the key elements more broadly being discussed. With China so far unwilling to grant public approval of the deal, the future of TikTok still hangs in the balance. If Trump follows through on his threat to impose new tariffs on remaining Chinese goods, then China will most likely retaliate with their own tariffs. This move could fundamentally cripple TikTok’s operations in the highly lucrative U.S. market.
Though the ban on ENRs is a constant threat, Trump has delayed implementation of such regulations three times already. This delay seems to be driven by his intention to arm-twist a deal that would see TikTok largely owned domestically. And the stakes are high! TikTok is much more than an important form of entertainment. TikTok raises the stakes in U.S.-China relations.
For context, China produces over 62% of the world’s rare earth production. This control is the choke point for producing the advanced semiconductors that run technologies such as TikTok. The United States has imposed heavy restrictions on the export of advanced AI chips to China. Should an agreement fail to materialize, this would greatly impact TikTok’s day-to-day operations. This interdependence further illustrates the complexity of these ongoing negotiations between the two countries.
The discussions touch upon public health concerns related to fentanyl, a substance linked to user safety on platforms like TikTok. The U.S. has led international alarm over Chinese companies’ integral role in manufacturing precursor chemicals used to synthesize fentanyl. According to a report by the U.S. House Select Committee on the CCP, “companies in China produce nearly all of illicit fentanyl precursors, the key ingredients that drive the global illicit fentanyl trade.”
In reaction to these fears, negotiators almost instantly agreed on a general principles accord. This pact specifically addresses the concerns about fentanyl being produced for export to the U.S. Bessent noted, “We agreed that the Chinese would begin to help us with the precursor chemicals for this terrible fentanyl epidemic that’s ravaging our country.” He mentioned that “they are going to delay that for a year while they reexamine it.”
In the end, the negotiations represent a complex balancing of interests – with each country trying to muddle their way past their own choke points. Meg Rithmire, a scholar on U.S.-China relations, remarked, “This has become a conflict that encompasses pretty much every aspect of the U.S.-China relationship, well beyond trade.” She added that “both countries are trying to figure out what they can take in terms of pain and what they can get.”
The intricacies related to TikTok don’t happen in a vacuum, but are actually part of larger economic and diplomatic factors at play. The Treasury Secretary Scott Bessent commented on the discussions, stating, “I think we’ve reached a substantial framework for the two leaders.”
As negotiations go on, stakeholders from all sides of the industry are still keeping a close eye. The agricultural community, from farmers to producers to exporters, have a vested stake in how these negotiations turn out. Bessent expressed optimism for farmers: “I believe, when the announcement of the deal with China is made public, that our soybean farmers will feel very good about what’s going on, both for this season and the coming seasons, for several years.”
