Trump and Xi Agree to Meet, Hailing TikTok Deal as a Win-Win

A phone call between Chinese President Xi Jinping and US President Donald Trump on Friday revealed "progress" on the TikTok deal and other issues, with Mr. Xi indicating he would be in favor of a commercial deal that benefits both sides. The conversation marked a significant shift in China's stance on the issue, with state media hailing recent negotiations as a win-win. Mr. Trump's administration had demanded that TikTok's Chinese owner sell its American operations, but China has long viewed the issue as a non-negotiable problem it could one day solve to defuse pressure from Washington.

Key Takeaways:

• The phone call between Xi Jinping and Donald Trump on Friday resulted in "progress" on the TikTok deal and other issues, with Mr. Xi indicating he would be in favor of a commercial deal that benefits both sides.
• China has shifted its stance on the TikTok issue, with state media hailing recent negotiations as a win-win.
• The deal may be a bargaining chip for China to extract concessions on economic and technological matters, such as U.S. export controls and tariffs.
• Chinese officials believe they hold maximum leverage over the U.S. due to their control over critical minerals, making it a strategic moment to use the TikTok card.
• The Chinese government has welcomed the idea of a commercial deal for TikTok, with Xi Jinping saying he respects the wishes of the company and would be happy to see productive commercial negotiations.
• The fate of TikTok in the U.S. pales in comparison to Beijing's other problems, such as U.S. export controls and tariffs, which could constrain China's own economic and technological development.
• The Trump administration has taken steps seen as favorable to China, including allowing certain AI chips made by Nvidia to be exported to China and telling President Lai Ching-te of Taiwan not to visit New York for a stopover that Beijing would have protested.
• Momentum has been building for a meeting between Xi Jinping and Donald Trump, with several officials speaking with their Chinese counterparts and the Trump administration taking steps seen as favorable to China.

Statistics:

• TikTok is deemed a national security threat in the United States.
• China's control over critical minerals gives it maximum leverage over the U.S.
• The Trump administration has taken four rounds of talks with China on trade and economic cooperation in the last four months, including lowering investment barriers and improving trade.
• China's leaders believe that a trade deal with the U.S. will help pave the ground for Trump to come to China, but they are wary of retracting promises due to Mr. Trump's unpredictability.
• Mr. Trump has publicly stated that he hopes the U.S. would sell more soybeans to China, and China could offer a commitment to buy more U.S. soybeans to lower tariffs.
• Boeing's order book is quickly filling up, making it late for China to bid on this year's soybean crop.

Sources:

• "President Xi Jinping says he welcomes a TikTok deal that would benefit both sides." - New York Times
• "China's leader, Xi Jinping, and President Trump spoke by phone, in a call Mr. Trump said had resulted in 'progress' on the 'approval of the TikTok Deal' and other issues." - New York Times
• "Yun Sun, the director of the China program at the Stimson Center in Washington, said 'There's much bigger fish to fry.' If China can use these small concessions to trade for a positive atmosphere, better U.S.-China relations, they will want to do it.' - New York Times
• "Chinese officials have let the issue fester for years, holding it in reserve as a problem they could one day solve to defuse pressure from Washington." - New York Times
• "Dimitar Gueorguiev, director of Chinese studies at Syracuse University, said TikTok's recommendation algorithm is less novel and therefore less important to the Chinese leadership than it was five years ago when the saga over the app began." - New York Times