Economy

TikTok’s Fate: Will Broader Trade Concessions Derail the U.S.-China Deal?

U.S. and China discuss TikTok deal. Beijing seeks trade concessions for ByteDance divestment; a ban looms.

byAndres Castro

September 15, 2025, 10:04 AM

A person holds a smartphone with the TikTok app icon visible on the screen

A person holds a smartphone with the TikTok app notification icon displayed on the home screen. By MDL.

Executive Summary

A potential U.S.-China agreement on TikTok’s divestment is contingent on Beijing’s demands for broader trade concessions, including existing tariffs.

The U.S. is unwilling to compromise national security for a social media application and is not in a position to eliminate all past trade measures.

While a ban looms without divestment, an extension of TikTok’s deadline is the most likely immediate outcome, with talks potentially paving the way for a meeting between President Trump and Chinese President Xi Jinping.

The Story So Far

The current negotiations surrounding TikTok’s potential U.S. ban stem from long-standing national security concerns regarding its Chinese ownership, prompting the U.S. to demand ByteDance’s divestment of its American operations. This issue is deeply embedded within broader U.S.-China economic and trade tensions, with Beijing linking any TikTok agreement to demands for wider trade concessions, including existing tariffs. Ultimately, these discussions are also viewed as a strategic opportunity to understand each other’s positions and potentially lay groundwork for a future meeting between President Trump and Chinese President Xi Jinping.

Why This Matters

The future of TikTok’s U.S. operations remains uncertain, as a final divestment agreement is currently contingent on broader U.S.-China trade concessions that Washington is reluctant to grant, particularly when national security is a concern. Consequently, the most immediate outcome is likely another deadline extension for ByteDance, with these ongoing discussions serving more as strategic groundwork to gauge “red lines” and potentially facilitate future high-level meetings between President Trump and Chinese President Xi Jinping.

Who Thinks What?

The U.S., through Treasury Secretary Scott Bessent, maintains it is unwilling to compromise national security for a social media application and views China’s demands for broader trade concessions as “a very aggressive ask,” indicating they are not in a position to simply eliminate past trade measures.

China views the TikTok deal as intricately linked to broader economic considerations, including existing U.S. tariffs, and has presented “a very aggressive ask” for trade concessions during the negotiations.

Experts observing the negotiations hold low expectations for an immediate significant breakthrough, viewing the talks as an opportunity for both sides to measure positions and learn “red lines,” potentially paving the way for a future meeting between President Trump and Chinese President Xi Jinping.

The United States and China are nearing a potential agreement on the social media platform TikTok, but a final deal appears contingent on Beijing’s demands for broader trade concessions, according to U.S. Treasury Secretary Scott Bessent. Discussions between U.S. and Chinese delegations in Madrid recently concluded their first day, focusing on the divestment of TikTok by its Chinese owner, ByteDance, amidst ongoing talks about tariffs and economic policy.

Negotiations and Sticking Points

The core of the current negotiations involves TikTok’s U.S. operations, which face a potential ban unless ByteDance divests them. Treasury Secretary Bessent indicated that Chinese counterparts presented “a very aggressive ask” during the talks.

However, Bessent affirmed that the U.S. is unwilling to compromise national security for a social media application. The recent discussions in Madrid addressed the strained trade ties between the two nations and the looming divestiture deadline for TikTok.

TikTok’s Future and Deadlines

TikTok is under pressure to transition to U.S. ownership to avoid a ban in the American market. The most likely immediate outcome of these discussions is anticipated to be another extension of the deadline for ByteDance to divest its U.S. operations.

While both sides have reportedly made good progress on technical details, achieving a broader agreement on other contentious issues remains challenging. The U.S. is not in a position to simply eliminate all past trade measures.

Broader Economic Context

From China’s perspective, the TikTok deal is intricately linked to broader economic considerations, including existing tariffs imposed by the U.S. Chinese Foreign Ministry spokesperson Lin Jian stated that Beijing had no new information to offer regarding the talks.

Expert Outlook and Strategic Goals

Experts observing the negotiations hold low expectations for a significant breakthrough in the immediate future. They view the current talks as an important opportunity for both sides to measure each other’s positions and learn more about their respective “red lines.”

Ultimately, some analysts suggest that these discussions are strategically aimed at paving the way for a potential meeting between President Trump and Chinese President Xi Jinping.

Key Takeaways

The ongoing U.S.-China discussions underscore the complex interplay between national security, economic policy, and technology. The future of TikTok’s U.S. operations serves as a critical barometer for the broader, often contentious, bilateral relationship between the two global powers.