The Chinese-owned social media platform TikTok was given a reprieve on Monday, January 20, after President Trump issued an executive order overruling a ban on the platform. The platform had been ordered to sell up or shut down over fears the Chinese government was using the popular video-sharing app to spy on its users. However, the parent company ByteDance has been given a 75-day extension to agree to a partial sale, with the 47th President publicly opining on a joint venture between the US and China.

TikTok boasts 170 million users in the US alone and has been valued between $50 and USD 300 billion. It has not only emerged as a titan of social media but also as a key lynchpin in geopolitics. A number of names have been floated as prospective buyers, from Elon Musk to the Youtuber Mr Beast. But at stake in the deal is more than personalities – through Tik Tok’s relationship with Beijing, it is likely to form part of a larger negotiation around trade and security.

China reportedly mulling Musk acquisition

According to reports, the Chinese government is reportedly weighing up a potential TikTok deal with Elon Musk. Beijing, which owns shares in ByteDance, would have to approve any sale of the company and are examining what impact a Musk takeover may have. As Bloomberg reports:

“A potential high-profile deal with one of Trump’s closest allies holds some appeal for the Chinese government, which is expected to have some say over whether TikTok is ultimately sold, said the people….

“Under one scenario that’s been discussed by the Chinese government, Musk’s X — the former Twitter — would take control of TikTok US and run the businesses together,”

The TikTok CEO Shou Chew has publicly thanked President Trump for his support of the app, attended the 47th President’s inauguration and issued a message to all TikTok users thanking him for repealing Biden’s ban. Chew is also known to have a longstanding relationship with Elon Musk – indicating the makings of a deal are there.

But it remains unclear whether a deal will be arranged by the Trump administration, or put out to tender to the various consortiums and contenders who have thrown their hat in the ring.

Trump threatens China with tariffs if it blocks Tik Tok deal

The TikTok deal has become a key issue in US-Sino relations, with President Trump indicating he could punish Beijing with tariffs if they refuse to facilitate a sale of 50 per cent of the social media app. If a deal isn’t hashed out before TikTok’s stay of execution expires, there could be major implications for the economy. Speaking to reporters at the White House the President made it clear that any blocking of the deal would be considered as a hostile action and could be met with tariffs of up to 100 per cent.

Perhaps sensing the acute threat of additional tariffs, above the 10 per cent set to come into force from February, officials in Beijing are reportedly amenable to a deal. As the Washington Post reported:

“Beijing appears to have slightly changed its position on TikTok in the past few days. It had consistently opposed the sale of the video app by its Chinese parent company, ByteDance.

“But China’s Foreign Ministry responded with relative openness this week to Trump’s proposal of a 50-50 joint venture between ByteDance and an American company.

“Instead of reiterating denunciations of unfair suppression of Chinese companies, the Foreign Ministry has, in recent days, underscored how TikTok has helped boost American jobs and employment, and it urged Trump to ‘listen to the voice of reason.’

“It has also signalled that it won’t necessarily block a deal.”

With Tik Tok now at the centre of US-China relations, the outcome of any potential deal threatens to impact, positively or negatively, the economy of both countries and as a result, trade across the globe.

Could a TikTok deal smooth US-China relations?

The US government’s linkage between the proposed sale of TikTok with issues of trade and security puts it at centre stage in US-China relations. The platform has the potential for enormous powers of influence and astronomic value. But concerns over user security means the US wants to step in and police it – and if they can’t, repercussions have been threatened.

In 2023, TikTok contributed over $24 billion to the U.S. GDP. The app’s digital marketplace reported a gross merchandise value of $9.7 billion in the same year. If a permanent ban cannot be averted the value of its US operations will be wiped out, but if a deal can be struck it is poised to become more valuable than ever.

Elon Musk as a potential buyer stands to expand his social media empire and perhaps shore up pro-Trump influence in the digital space. A known confidant of the ByteDance CEO, Musk could serve as a bridge between the two nations. Reports suggest that Chinese officials are considering a deal where Musk’s X would acquire TikTok’s U.S. operations. Such a move could potentially satisfy U.S. national security concerns while allowing China to maintain a degree of influence over the platform.

A successful deal could set a precedent for future collaborations between U.S. and Chinese companies. When foreigners do business in China, they can, depending on the sector, be required to have a Chinese partner or a joint venture structure – with the US taking a similar line on TikTok’s operations this deal could be the making of a new model of investment in sensitive technologies. Conversely, failure to reach an agreement could exacerbate trade disputes, leading to economic consequences on a global scale. The prospective acquisition of TikTok by the US is more than a business transaction; it is a focal point in the broader narrative of global economic and political relations. The outcome of this situation will likely have lasting effects on international trade, technological innovation, and the economic landscape, underscoring the intricate interplay between commerce and geopolitics in the modern world.