Trump, Xi to hold call as TikTok, tariffs and Nvidia loom large

The leaders’ conversation will be their first since June, with the two countries locked in a standoff over trade restrictions ensnaring key industries including semiconductors and rare earths. That includes wrangling over the future of chipmaker Nvidia Corp.’s access to China, currently hampered by US export controls and Chinese efforts to curb local demand for its products.

“We’re very close to deals on all of it,” Trump said, alluding to trade talks as well as TikTok. “And my relationship with China is very good.”

The call may also tee up a potential in-person meeting, in what would be a first since Trump returned to office. That engagement should yield a broader agenda including an expected Chinese order for Boeing Co. planes and potentially deeper discussion of geopolitical issues as conflicts continue to rage in Ukraine and the Middle East and skirmishes escalate in the South China Sea.

Trump’s interest in wielding his transactional diplomacy to notch a TikTok deal has drowned out any lingering national security concerns that had underpinned the bipartisan law that took effect in January. The president has signed several executive orders extending the law’s deadline — though his legal footing for flouting the law and allowing the app to continue operating is not fully clear.

“There is tremendous value, and I hate to give away value,” Trump said of the popular app on Thursday in the UK after a meeting with Prime Minister Keir Starmer. “I’d rather reap the benefits.”

The as-yet unannounced TikTok arrangement would see ByteDance hold no more than 20%, while the other investors include Oracle Corp., Andreessen Horowitz and private equity firm Silver Lake Management LLC, according to people familiar with the matter. Trump said while in the UK that it would be “owned by all-American investors” and “companies that love America” but did not directly answer a question about whether the app would require a new algorithm.

If it’s an arrangement in which a Chinese entity is licensing its technology to the US but retaining control and ownership of that fundamental technology, “China would see that as a successful outcome in that it’s consistent with their vision of making the world increasingly dependent on technology that China continues to control,” said Henrietta Levin, Freeman Chair in China Studies at the Washington-based Center for Strategic and International Studies.

That runs counter to “what I understand the law to actually require, which would be US corporate ownership over that capability,” she added.

Trump needs to be prepared to back away if Xi stops short of US expectations on the algorithm, said Steve Yates, a senior research fellow at the Asian Studies Center at the Washington-based Heritage Foundation, a conservative think tank.

“If there are any shortcomings and it doesn’t comply, the president has to call the bluff and proceed with the threat to pull TikTok off the market in the US unless and until they can get back within range,” Yates said.

Trump was once a critic of TikTok but has shifted his views of the app, which he credits with helping him make gains among young voters in last year’s election. He told reporters on Tuesday that “the kids wanted it so badly” with parents calling him to say “they’re in big trouble with their kids” if a deal isn’t done.

Nvidia, whose chips are powering the global artificial intelligence sector, is likely to be tracking the call as closely as ByteDance. The world’s most valuable company has pressed the Trump administration to ease US restrictions on exports of AI chips to Chinese customers.

More recently, Chinese authorities say Nvidia violated anti-monopoly laws, the latest pressure on the company that is already juggling efforts to stay in Trump’s favor. And authorities in Beijing have begun pressing Chinese tech companies to refrain from buying Nvidia products and to instead rely on domestic suppliers.

Whether Nvidia can win relief from US export curbs and the intensifying pressure from the Chinese government will be a test of the relationship that Chief Executive Officer Jensen Huang has sought to cultivate with Trump since the president took office in January. Huang has promised to spend as much as $500 billion on AI infrastructure in the US — music to the ears of Trump, who regularly touts the billions of dollars in domestic AI investment plans outlined by tech industry leaders.

Huang joined Trump for parts of his UK visit, with Trump mentioning him offhand during an event with Starmer and joking about the company’s prowess in AI.

“You’re taking over the world, Jensen,” Trump said. “I don’t know what you’re doing here. I hope you’re right.”

The US and China are also in the midst of a détente, until November, of a tariff fight that at one point saw levies from the US surge to as high as 145%. One remaining 20% levy on China is meant as pressure to curb the flow of fentanyl and materials used to produce it.

While Trump said on Thursday “on a much bigger scale, we’re pretty close to a deal,” his position could be undercut by a pending Supreme Court ruling on the legality of a certain tariff power that he used to apply the China levies.

As the fate of the truce remains murky beyond the latest extension to November, Yates said he “would not be expecting immediate results.” Meanwhile, Trump has called for allies to ramp up penalties on China and India in a bid to raise economic pressure on Russian President Vladimir Putin and bring the war in Ukraine to an end.