The five-year "TikTok war" between the United States and China appears to be ending in a U.S. victory. A deal is imminent for a U.S. investor group to acquire TikTok's U.S. operations, with the United States also gaining control over the core technology—the algorithm. But some analysts said China did not simply wave a white flag, arguing it used TikTok as a "bargaining chip" to secure gains on more important issues—tariff, advanced technology, and Taiwan—amounting to a "tactical retreat."
Caroline Leavitt, the White House Spokesperson, said on the 21st (local time), "The deal for TikTok's U.S. operations has been finalized, with only signatures remaining in the coming days." On the board of the newly established TikTok U.S. entity, six of the seven directors will be Americans. Data of 170 million U.S. users will be managed by Oracle, whose chair is Larry Ellison, a close ally of President Trump. The United States will also have control over the "algorithm," the biggest sticking point in the talks.
President Donald Trump personally brokered the transaction. In a Fox News interview on the 21st, Trump said that Larry Ellison, chair of Oracle, Michael Dell, chair of Dell Technologies, and the family of Rupert Murdoch, chair of Fox Corporation, are joining the acquisition consortium. The buyers are expected to pay the U.S. government a "brokerage fee" amounting to several billion dollars in return for approval of the deal. Trump said of this, "We're going to get something," adding, "I call it a fee plus."
On the surface, China appears to have yielded to U.S. pressure that framed TikTok as a national security threat. The U.S. Congress passed a law in 2024 that would ban the service unless ByteDance, TikTok's Chinese parent, divested its U.S. operations. But the New York Times (NYT) said the agreement is a "concession made from a position of advantage" by China. After five years of fighting, TikTok has, from China's perspective, become a "relatively low-value bargaining chip."
The NYT reported that, in exchange for giving up TikTok, China won more important gains. The issues China cares most about are: ▲ lifting U.S. tariff ▲ easing export controls on advanced semiconductor chips ▲ reducing U.S. support on the Taiwan issue. According to the NYT, China saw that President Trump likes a "good deal" and actively leveraged TikTok during the 2024 election to court young voters. The strategy is to hand Trump a "symbolic victory" in the form of TikTok, while extracting concessions on core economic and security issues. The NYT called it "a move that looks weak but in fact aims to focus President Trump on the things China cares about most."
Recently, President Trump and Chinese President Xi Jinping created a friendly mood by reaching a tentative agreement over the phone on the sale of TikTok. China's state-run Xinhua News Agency reported that Xi said he "welcomes the negotiations related to TikTok." The NYT said the deal has increased the likelihood of a U.S.-China summit and created the possibility that the United States could make concessions on other issues China wants.