The TikTok showdown: Can America contain a Chinese tech giant without breaking it?
The TikTok compromise highlights shifting priorities in both Beijing and Washington and reflects the new realities of global tech competition (and possibly cooperation), says US academic Sarah Kreps.
After months of awkward extensions that left TikTok in legal limbo and put it at odds with 2024 legislation calling for divestiture or a ban, Washington and Beijing appear to be hammering out a deal that would transfer TikTok’s US operations to an American buyer (or a consortium of American buyers). The outlines are still emerging, and many details remain unsettled.
The uncertain technical picture creates an opportunity to step back from the legal fine print and consider the broader picture: what this deal reveals about Beijing, Washington and TikTok itself. The compromise highlights shifting priorities in both capitals and reflects the new realities of global tech competition (and possible cooperation).
Beijing’s perspective: guarding strategic technology
For Beijing, the priority is to protect TikTok’s recommendation engine as a strategic national technology. For Washington, the imperative is to ensure that the same algorithm cannot be a channel for covert influence. Whether the new framework ultimately leaves ByteDance with ownership, grants US authorities operational oversight or settles somewhere in between, the struggle itself is telling. Beijing’s decision in 2020 to place TikTok’s recommendation engine under export controls illustrates how governments now see algorithms as assets with national security value.
Beijing can portray any arrangement short of a forced sale as proof it has defended a national champion against Western pressure, while US officials can argue that expanded audits and domestic governance insulate users from foreign manipulation. The exact balance of ownership and oversight may remain murky, but the broader point is clear: both governments see control over the algorithm not as a technical detail but as a test of sovereignty and power in the digital age.
Trump’s framework signals a different priority: preserving commercial ties while managing, rather than eliminating, security risks.
Washington’s perspective: from custody to steerage
In the US, the Trump administration has shifted the TikTok debate rather than resolved it. Many members of Congress — including Republicans in Trump’s own party — remain deeply sceptical of the platform and the risks of foreign influence. But Trump’s framework signals a different priority: preserving commercial ties while managing, rather than eliminating, security risks.
Central to this reframing is the expectation that the US government itself would receive a percentage of the deal — a “fee-plus”, in Trump’s words. Reports suggest this could amount to billions of dollars — an unprecedented sum for a government role that resembles an investment banker’s cut.
Yet the financial layer sits atop a still-unsettled security debate. TikTok’s original “Project Texas” — focused narrowly on data custody, including where US user data was stored and who could access it — was widely seen as an inadequate solution to national security concerns. Its successor, “Project Texas 2.0”, is implicitly embedded in the new deal: it promises localised storage and stricter oversight but leaves unresolved questions about the scope of audits, the independence of reviewers and the durability of scrutiny.
Even if those data issues were fully resolved, they would not address the deeper national security concern: algorithmic steerage — the ability to shape what hundreds of millions of Americans see, when and how.
Even if those data issues were fully resolved, they would not address the deeper national security concern: algorithmic steerage — the ability to shape what hundreds of millions of Americans see, when and how. That risk persists regardless of where the data sits, so long as China retains ownership of the algorithm and influence over its updates.
This tension between commercial arrangements and security oversight raises three questions the US government still cannot clearly answer: who has authority to approve or veto updates to the recommendation engine? What mechanisms exist to pause or block suspicious code changes? And how can compliance be independently verified? Without credible answers, oversight risks being cosmetic rather than substantive — leaving space for critics in Congress to renew calls for a ban or forced divestiture.
TikTok’s business perspective: costs and continuity
For TikTok, the new regime is disruptive but survivable. Building a ring-fenced US infrastructure stack, duplicating engineering teams and subjecting code to regular audits will all raise operational costs. Depending on how algorithm oversight is implemented — whether ByteDance retains ownership or US authorities gain operational control — TikTok may also face constraints on how quickly it can push updates. In either case, the compliance burden will slow the cadence of feature rollouts, leaving TikTok at a disadvantage against competitors like Meta or YouTube that can deploy updates globally without additional checks.
The US framework could become a template for other governments, many of which are already moving in that direction.
Yet for TikTok’s business model, predictability beats purgatory. Advertisers crave stability. A clear, codified oversight regime, even if intrusive, provides more certainty than perpetual threats of a ban. As long as the US market remains open, TikTok preserves access to its largest advertising pool and sustains the network effects that make the platform sticky for creators and users.
Globally, TikTok is facing a much tougher compliance environment. The US framework could become a template for other governments, many of which are already moving in that direction. For example, a 2025 European Parliament document (2025) outlines proposed regulations requiring platforms like TikTok to increase algorithmic transparency, disclose internal policies, and ensure greater oversight of recommendation systems. Some countries are already demanding data localisation, audit rights and stricter reporting standards. These cumulative pressures raise TikTok’s costs and slow its innovation cycles — but they also signal that the platform must accept national oversight if it wants to remain in key markets.
For most users, TikTok may continue to look and feel the same, at least in the short term. If regulators are satisfied with licensing and audit arrangements, the “For You” feed will remain intact. But history suggests compliance has a way of subtly changing how platforms evolve: TikTok’s own “Lite” rewards feature was suspended in Europe after regulator pushback, Facebook’s Dating service was delayed for privacy compliance reasons, and Apple has slowed some feature launches in the EU to meet new obligations.
These cases suggest that TikTok’s US compliance regime could translate into slower rollouts and occasional feature withdrawals — changes most users might not notice day-to-day, but which shape the platform’s long-term trajectory.
Trump’s words suggest that much of this is negotiable: security concerns are balanced against commercial ties, leaving the original anxieties about influence and control unresolved.
The bigger picture
At its core, the TikTok deal reflects a balancing act: keeping a wildly popular platform accessible while attempting to blunt risks tied to national security and foreign influence. For Beijing, it may safeguard intellectual property and signal resistance to US pressure, though the details of what is actually preserved remain unclear. For Washington, it opens the possibility of verifiable guardrails against covert influence, though questions linger over who ultimately controls the algorithm. For TikTok, the deal offers continuity but likely at the price of higher costs and slower innovation as compliance demands grow. And for users, the experience could remain largely unchanged for now, but the real test will be whether compliance and oversight eventually ripple into what appears on their screens.
TikTok is only one piece of a much larger set of digital challenges. The deal nods to data security, but that is only the tip of the iceberg in a world where digital threats — from porous data borders to algorithmic manipulation to AI competition — are multiplying. The deeper question is whether oversight can keep pace with these risks, or whether the TikTok compromise is largely cosmetic. For now, Trump’s words suggest that much of this is negotiable: security concerns are balanced against commercial ties, leaving the original anxieties about influence and control unresolved.
