US-China Trade Tensions: TikTok, Tariffs, and the Upcoming Summit

Source Credit : Portfolio Prints

Introduction

US-China relations remain at a critical juncture in late 2025. Key flashpoints still include trade policy, technology regulation, national security, and geopolitical rivalry. Recently, momentum has picked up around resolving one of the more visible issues: the future of TikTok in the United States. At the same time, both nations are navigating tariff disputes, export controls, and planning leader-level diplomacy in hopes of stabilizing relations.

What’s New with TikTok

• The U.S. and China have reached a framework agreement concerning the ownership and operation of TikTok in the U.S.


• Under this framework, TikTok is to remain operational while its U.S. assets are transitioned to American-controlled ownership.


• Key details such as how much stake U.S. investors will hold, how much Chinese ownership will remain, who controls the algorithm, how user data will be handled, and how compliance with U.S. national security law will be ensured are still to be finalized.


• Specifically, one proposal under discussion involves a U.S.-led consortium of investors acquiring a majority stake, leaving only a minority Chinese ownership (~20%), operated by a U.S. majority board, possibly with an administration-appointed member.


• Congress has passed laws (including one that could ban TikTok unless it severs control from ByteDance) and deadlines have been extended several times as the parties negotiate.

Tariffs and Broader Trade Tensions

• Alongside the TikTok issue, tariffs remain a central lever in U.S. trade policy toward China. The Trump administration has imposed steep and broad tariffs, and China has retaliated with its own restrictions.


• Recent actions include a U.S. move to impose 20% tariffs on certain Chinese imports, tied to concerns over China’s role in fentanyl precursor flows.


• China has responded with investigations into U.S. semiconductors (such as analog interface/gate driver chips), anti-dumping probes, and altered or increased export controls.


• There have also been more significant tariff truce efforts: e.g., a pause or mutual lowering of some tariff rates for a 90-day period in prior months to reduce immediate trade disruption.

The Upcoming Summit & Diplomacy

• Trump and Xi Jinping are expected to meet on the sidelines of the APEC Summit in South Korea, expected around late October.


• Trump has also indicated a plan to visit China in early 2026, with Xi possibly visiting the U.S. in turn “at the appropriate time.”


• These meetings are viewed as crucial for solidifying the framework agreement on TikTok, resolving or easing tariff disputes, and potentially establishing mechanisms for ongoing dialogue on trade, technology export controls, and national security issues.

Stakes & Challenges

• National Security vs. Commercial Interests: A core driver behind U.S. concerns is that Chinese-based ByteDance (TikTok’s parent) could be compelled under Chinese law to share data or allow government access. Ensuring U.S. oversight over algorithms and data is key for U.S. negotiators.


• Transparency & Enforceability: Even a framework must be backed by enforceable terms: who owns what, who has access to data, what oversight mechanisms exist, and how disputes will be settled. Without clarity, the deal may not satisfy Congress, courts, or public opinion.


• Retaliation & Escalation: Tariffs and trade restrictions have ripple effects: American industries like agriculture are already suffering from Chinese import restrictions or reduced demand; Chinese restrictions also hurt U.S. businesses.


• Geopolitical Pressure: Issues beyond trade—Taiwan, Taiwan’s relations, the South China Sea, Russia-Ukraine war, rare earths export controls—remain intertwined with trade policy. Momentum on trade/tariffs may ebb or surge depending on these broader strategic factors.

What to Watch Next

Final Terms of the TikTok Deal: What share of ownership, how algorithm and data handling are managed, who enforces the conditions.

Tariff Adjustments: Will there be further pauses, reductions or new rounds? How broadly will they apply?

Export Control Regimes: Especially in technology sectors (chips, semiconductors, AI hardware), this is a growing front in the US-China competition.

Outcomes of the Summit: Whether the APEC meeting (and any bilateral meeting between Trump and Xi) produces concrete agreements or just declarations.

Domestic Constraints in Both Countries: U.S. Congress, the courts, public opinion; in China, balancing control with economic growth, maintaining face, domestic political dynamics.

Conclusion

The current moment may represent one of the more promising windows in recent months for easing US-China tensions — especially with the TikTok issue nearing resolution, leadership meetings on the calendar, and both sides showing at least partial willingness to negotiate. But many details remain unsettled, and missteps on either side (over tariffs, over regulatory oversight, or over strategic brinksmanship) could quickly undo progress. The world is watching: the outcomes will matter not just for U.S. and China, but for global trade, technology governance, and international norms.