After months of complex negotiations filled with unexpected twists, uncertainty, and political maneuvering, TikTok has finally signed a deal that allows the platform to continue operating in the United States. Yesteday, CEO Shou Chew announced that the company had executed binding agreements to transfer its U.S. operations to a joint venture controlled primarily by American investors. This landmark development comes just a week before the final deadline, with the transaction expected to close on January 22, 2026. While this might seem like just another corporate deal to the average person, the road to this agreement reveals something fascinating: the TikTok sale has been inextricably linked to the broader U.S.-China tariff war the entire time, even though the deal itself probably won’t actually change how trade tensions play out.
Let’s back up for a second and explain what’s actually happening here. Under a law that Congress passed last year and President Biden signed, TikTok’s Chinese parent company ByteDance was required to either sell the app or face a ban in the United States. The deadline was supposed to be January, but Trump kept extending it through executive orders while negotiations continued. The new deal creates a structure where Oracle, Silver Lake, and the Abu Dhabi-based firm MGX will collectively own 45% of the U.S. entity, existing ByteDance investors will hold about 30%, and ByteDance itself will maintain less than 20% ownership — just below the legal threshold. According to Trump’s earlier statement in September, the deal valued TikTok’s U.S. business at roughly $14 billion, though some analysts suggest the actual value could be significantly higher. The new American-controlled company will operate independently, managing U.S. user data, content moderation, and the critical algorithm that powers the platform.
Now here’s where the tariff situation becomes genuinely important to understanding this story. Back in April, negotiations had actually come remarkably close to completion. ByteDance, U.S. investors, and the Trump administration had essentially agreed on a framework. A draft executive order was reportedly circulating, and everyone seemed ready to move forward. But then Trump announced a new round of tariffs on Chinese imports, including an additional 34% tariff on China. Almost immediately, ByteDance pulled back from negotiations. The company informed the White House that they weren’t willing to proceed with the TikTok deal until the tariff situation was resolved. It was a stunning moment that exposed just how entwined these two issues had become. Trump literally admitted this on Air Force One when speaking to reporters, saying he’d been pretty close to a deal and then China changed the deal because of tariffs.
This wasn’t an isolated incident either. Throughout 2025, the pattern continued. In April, Trump extended TikTok ban enforcement deadlines after China tariffs derailed the deal. In October, eMarketer reported that Trump was threatening 100% tariffs on Chinese imports while China promised retaliatory measures, putting the TikTok deal on thin ice. The fundamental dynamic was simple China has to approve any sale of the algorithm technology under its export control laws, and Beijing was clearly using that leverage to signal dissatisfaction with Trump’s tariff approach. U.S. officials even acknowledged that a TikTok deal was unlikely to proceed before hostilities with China were resolved. The Chinese government reinforced this by repeatedly stating that any TikTok deal had to comply with Chinese law and regulations, particularly regarding technology exports.
However, here’s the crucial thing to understand about the current situation. While the tariff war was absolutely crucial to whether a deal could happen at all, the actual completion of this deal probably won’t meaningfully change the broader tariff conflict. This is worth thinking about carefully. The TikTok sale represents a significant concession and negotiating point for China. In one sense, China got this deal by essentially holding firm on tariffs and making it clear they wouldn’t move on TikTok without serious negotiations on trade. But having finally agreed to let this deal go through doesn’t mean trade tensions suddenly vanish. Trump administration tariffs remain in place on Chinese goods, and the underlying disputes about intellectual property, technology transfer, and trade imbalances haven’t been resolved. The TikTok deal is more like one checkpoint in an ongoing negotiation rather than a comprehensive resolution to U.S.-China economic tensions.
Here’s the thing, folks: What actually happened was a temporary easing of tensions that allowed both sides to claim victory on TikTok. Over the summer, the U.S. announced tariff reductions on certain Chinese imports, and the climate shifted from confrontation toward diplomacy. This was more about creating space for negotiation than fundamentally changing the trade relationship. The underlying issues that drove the tariff war in the first place — American concerns about data security and Chinese influence over the algorithm, combined with broader trade and technology disputes — haven’t actually been resolved. They’ve just been managed through this creative deal structure.
With that… Many are asking, What does this mean going forward? What it means is this, TikTok’s 170 million American users get to keep using their app, which matters a lot to creators, businesses, and casual scrollers who depend on the platform. Oracle will manage the security and oversee the algorithm. American investors take control. From a business perspective, this is actually a clever solution that addresses some national security concerns while keeping the platform alive. But the trade war between the United States and China will almost certainly continue to simmer, with different flashpoints and different rounds of tariffs.
If you cannot work with them on the negotiations, then root for the side you’re on.