TikTok US-China Deal: Beijing Confirms Algorithm Use as Trump Extends Deadline
Beijing has confirmed that TikTok’s U.S. app will continue to run on its Chinese-developed algorithm, even as Washington raises national security concerns.
President Donald Trump extended the deadline for a U.S. shutdown, saying he is working on a broader TikTok US-China deal that could reshape the platform’s future.
What Beijing said
China’s Ministry of Commerce stated that TikTok’s recommendation system—the powerful algorithm that drives its user engagement—remains under Chinese export controls.
Officials reiterated that Beijing views the algorithm as a “strategic technology asset,” allowing it to be licensed but not transferred outright.
That means U.S. users will still rely on the Chinese-developed version, raising fresh questions about data security and oversight.
Trump’s extension and promise
President Trump, who has long argued that TikTok poses a national security risk, extended his administration’s deadline for banning the app.
He signaled optimism about a potential agreement with China, describing it as a “comprehensive social media and technology deal” that could prevent disruption for TikTok’s 170 million American users.
The White House framed the extension as a window for negotiations with ByteDance and potential U.S. partners.
Market and political reaction
- Tech stocks: U.S. social media peers like Meta (META) and Snap (SNAP) dipped on the news, as a TikTok ban would have boosted their ad market share.
- China equities: Shares of ByteDance-linked firms and other Chinese internet names rallied on hopes that TikTok avoids a U.S. shutdown.
- Political risk: Lawmakers from both parties remain skeptical, with some pressing for stricter safeguards even if a TikTok US-China deal is reached.
What traders should watch
- 2-Year yield vs. tech beta: If negotiations reduce political risk, high-beta names like SNAP, META, and GOOGL could rally with growth sentiment.
- Event-driven setups: On headlines around deal progress or setbacks, scalp volatility in short-term options or ETF proxies like KWEB (China Internet ETF).
- Defensive hedge: If talks collapse, expect rotation into META/SNAP long trades as ad budgets redirect, while shorting Chinese tech ETFs intraday.
Headline risk is high — traders should anchor VWAP to the minute of policy announcements and fade extreme moves that fail to confirm with volume.
Bottom line
The TikTok US-China deal remains in flux: Beijing insists on algorithm control, while Washington seeks safeguards.
Trump’s extension gives markets temporary relief, but headline-driven volatility will dominate trading.
Social media names and China tech ETFs will offer the cleanest intraday setups as traders react to each twist in negotiations.