Donald Trump and Xi Jinping engaged in a phone call to negotiate an agreement regarding TikTok’s operations in the United States. The discussion aims to address ongoing trade tensions between the two nations, as reported by Chinese state media. The specifics of their conversation remain undisclosed, and the White House has not yet commented on the matter.
This diplomatic effort coincides with preparations for a potential in-person meeting during the upcoming Asia-Pacific Economic Cooperation (APEC) summit in South Korea, scheduled for October 30 to November 1, 2023. The central point of contention is the proposed transfer of TikTok’s U.S. assets from its Chinese parent company, ByteDance, to American owners. TikTok has gained immense popularity as an online video-sharing platform, raising concerns among U.S. lawmakers about national security implications.
Negotiations and Ownership Structure
Congress has mandated that TikTok’s U.S. operations be sold by January 2025 or face a shutdown for American users. Trump has refrained from enforcing this directive while seeking a new owner, citing potential backlash from TikTok’s extensive user base and the importance of maintaining communication channels.
U.S. Treasury Secretary Scott Bessent has indicated that the proposed framework would facilitate the ownership transition to American stakeholders. Trump acknowledged TikTok’s significance in his political success, stating, “I like TikTok; it helped get me elected.” He emphasized that the United States holds substantial leverage in the negotiation process by having the final approval over the deal.
Key uncertainties linger regarding the arrangement. Questions remain about the exact ownership structure, the extent of control retained by China, and whether Congress will endorse the deal. Sources close to the negotiations suggest that U.S. TikTok may still utilize ByteDance’s algorithm, raising alarms among lawmakers concerned about potential espionage and influence operations by Beijing. In response, China has asserted that there is no evidence of any national security threat associated with the app.
Broader Trade Issues
During the press briefing, Trump hinted at broader trade discussions, mentioning, “We’re pretty close to a deal.” He referenced the possibility of extending current trade terms with China, which he described as favorable for the U.S. Other significant trade topics include competition in the semiconductor sector and advanced technologies.
The U.S. is advocating for increased Chinese purchases of American agricultural products, including soybeans and Boeing aircraft. Additionally, U.S. officials are pressing for stricter measures from China to curb the export of fentanyl-related chemicals, which have been linked to a surge in overdose deaths in the United States. Beijing has criticized Washington for misrepresenting these issues.
Since taking office in January, Trump has implemented substantial tariff increases on a variety of imports, particularly targeting China’s export-driven economy. This escalation has provoked a reciprocal response from China, resulting in tariffs soaring to triple-digit percentages as of April. The ongoing trade conflict has seen a series of limited agreements aimed at de-escalation, although many contentious issues remain unresolved.
Despite the tariffs, China continues to be the United States’ third-largest trading partner and the source of its most significant trade deficit in goods. While Trump has threatened additional tariffs on Chinese exports connected to Russia’s oil purchases, he has yet to act on these threats. Concurrently, regional tensions surrounding Taiwan and the South China Sea are growing, though they have not received as much attention in Washington compared to other global conflicts.
The Chinese embassy in Washington emphasized the importance of high-level diplomacy, with spokesperson Liu Pengyu stating, “Heads-of-state diplomacy plays an irreplaceable role in providing strategic guidance for China-U.S. relations.” A recent goodwill gesture from China involved allowing the departure of a Wells Fargo banker, Chenyue Mao, who had been unable to return to the U.S. for several months.
As negotiations continue, the outcome of the discussions over TikTok, along with broader trade relations, remains crucial for both nations as they navigate an increasingly complex geopolitical landscape.
