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U.S., China Close In On TikTok Deal But Punt on Tariffs, Export Controls, and Other Frictions

Sep 15, 2025 08:31:00 -0400 by Reshma Kapadia | #China

TikTok has been subject to ongoing negotiations over its status in the U.S. (Roni Bintang/Getty Images)

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The U.S. and China have reached a “framework for a deal” that saves the social media app TikTok from a ban in the U.S. But officials meeting in Spain punted on export controls, tariffs, and a slate of other issues, complicating their strategic rivalry for a later date.

Treasury Secretary Scott Bessent said Monday in a press briefing following the second day of talks that the U.S. and China had reached a commercial agreement that would put TikTok, the app used by 170 million Americans that is currently owned by ByteDance, in the hands of an American owner to address national security concerns.

However, he declined to comment on the details, including whether a divestment would include TikTok’s algorithm or what concessions the U.S. made in return. Bessent said the deal was subject to a signoff between President Donald Trump and Chinese leader Xi Jinping, who are set to speak on Friday.

In a press briefing, trade negotiator Li Chenggang confirmed the two sides had reached a framework agreement, noting “candid, in-depth” exchanges between the two sides. “The U.S. side has also expressed its willingness to move together with China toward the same goal when it comes to reducing barriers to investment and promoting relevant cooperation on the trade and economic front,” he said.

Trump extended the self-imposed deadline for TikTok to shed its Chinese ownership in compliance with a 2024 law passed by Congress that built on Trump’s push to get TikTok’s parent to shed the asset due to national security concerns and organize a group of U.S. companies that included Oracle to purchase it. The most recent deadline expires Sept. 17. Oracle stock rose nearly 2% on expectations that the company would be involved in any deal.

The TikTok deal came on the heels of Beijing launching an antimonopoly probe into Nvidia for a 2020 acquisition. Bessent said the team noted the “poor timing” of the investigation on the day of these talks but described talks with his counterparts as “respectful, wide-ranging and in-depth.”

In a social media post announcing a TikTok deal, Trump said: “The big Trade Meeting in Europe between The United States of America, and China, has gone VERY WELL! “ and described the relationship with China “remains a very strong one!!!”

Bessent said the two sides would hold trade negotiations in a month, but didn’t offer a date. U.S. Trade Representative Jamieson Greer described the talks as productive and left open the possibility of further extending the pause on tariff increases on China that expires Nov. 10.

The softer rhetoric, even in the face of friction like the Nvidia probe, speaks to efforts to get an in-person meeting on the calendar for Trump and Xi this fall, either at the Asia-Pacific Economic Cooperation summit in Korea or a Trump visit to Beijing.

For the U.S., continued access to critical minerals and commitments to buy energy and agriculture are likely priorities, according to analysts. Tariffs have dented U.S. agricultural exports, with China buying much more soybeans from Brazil, hurting U.S. farmers’ market share. Pressure from farmers on the administration could build into the fall and translate to some pushback on tariffs from Republican lawmakers.

The U.S. is also pushing the European Union to put tariffs on China for its purchases of Russian oil—something the U.S. has opted not to do yet, even as it has penalized India, which buys less than China, with 25% tariffs. The U.S. has also pushed Mexico to hit China with tariffs; Beijing has warned Mexico about taking such moves.

China wants the 20% tariffs that Trump imposed earlier this year related to fentanyl flows lifted and further reprieve on export controls, particularly on critical technologies like high bandwidth memory, says Paul Triolo, a partner at geopolitical consultancy DGA-Albright Stonebridge Group. TikTok, he says, is not that important to the Chinese.

The technology battle between the two countries also persists. In addition to the probe into Nvidia, Beijing recently launched an antidumping and antidiscrimination probe into certain analog chips, targeting companies like Texas Instruments , and has been warning local companies not to use AI chips from Nvidia and Advanced Micro Devices —even as the companies pushed for the U.S. to loosen restrictions on its ability to sell these chips in China.

“Beijing hinted at the probe back in January but timed the announcement to coincide with the continuing trade talks, which in my view is clearly aimed at maximizing leverage for the talks and signaling to affected foreign firms to lobby Trump for loosening tech export controls,” says Laila Khawaja, an analyst at Gavekal Research. “China still depends heavily on Nvidia, Texas Instruments, and others. Just now, Beijing wants them to work harder (lobbying) to retain market access.”

Triolo notes that Nvidia has developed good relationships with Chinese government officials and will likely try to address any concerns or new measures that come from regulators. But it still finds itself between both countries, and also different factions of the governments.

“Nvidia is in a particularly difficult position, caught between contradictory policies from both Washington and Beijing,” Triolo says. “Elements of both governments are also at odds with some industry preferences: Beijing is telling its companies, which prefer to use some Nvidia hardware, to consider domestic alternative. China hawks in Washington have been increasingly critical of Nvidia and of the Trump administration decision to license H20 GPUs that Nvidia has already produced for Chinese customers.”

The situation speaks to the unease and uncertainty companies could face as both countries deal with the fragility of their truce.

Write to Reshma Kapadia at reshma.kapadia@barrons.com