This article was originally published in Chinese on Momentum Works Wechat content platform, translated into English by the MW team. 

Today (January 20th) marks Donald Trump’s inauguration; and the latest update is that, following Trump’s assurances, TikTok has resumed operations in the US after a one-day (14 hours to be specific) suspension. 

Here are some of our thoughts:

  1. There has been a surge of discussions about TikTok in various WeChat and WhatsApp groups. People are eagerly sharing and interpreting the latest news based on their own expectations. However, it seems like no one truly knows or can control how things will unfold. We don’t have insider information either; and even if we did, we couldn’t share it publicly; plus if we did share, people might not believe anyway;

  2. What is certain, though, is that the situation has improved significantly from early last year,  when the US Congress first passed the TikTok ban bill. Back then, friends familiar with the US political system saw no good options for TikTok. The outgoing Biden administration and the US Supreme Court probably also considered the issue too hot to handle – leaving it for Trump to deal with instead. However, at least for now, Trump appears to have clearer ideas about options for TikTok’s future in the US;

  3. This means a deal is now possible, if not already reached. For TikTok, survival in the US is crucial, while other stakeholders, including the Chinese government, will have more paramount considerations (e.g. selling is not an option). Whether a deal can be struck depends on whether all parties involved can agree on a set of specific terms;

  4. Looking back at the merger waves in China’s internet sector precisely a decade ago (incl. Didi/Kuaidi and Meituan/Dianping), we often saw aggressive market share battles and public posturing before the agreement was reached. Trump’s approach to negotiation follows a similar pattern – starting with a high asking price;

  5. On a personal and practical level, keeping TikTok running in the US benefits Trump significantly. Beyond the widely discussed credit for “saving TikTok for its users”, Trump needs TikTok as a direct channel to engage with young Americans;

  6. Trump’s biggest enemies are in the US (not China), and he is well aware of this;

  7. The TikTok situation has major implications for Chinese companies with scale and influence looking to expand globally. Regardless of the final outcome, the TikTok case will serve as a reference for future regulatory/political actions;

  8. A similar precedent was set when Temu was banned in Vietnam. Some argued that the impact was minimal due to the relatively low order volume (hundreds of thousands per day), but this marked the first time a country fully halted the operations of the Chinese cross-border platform. This move could increase compliance costs and pressure in other key markets of Temu, and its competitors;

  9. Over the past two years, TikTok CEO Shou Chew has performed exceptionally well under immense pressure. No wonder Xiaomi founder Lei Jun mentioned in his annual speech last year that Chew’s resignation from Xiaomi was a heavy blow for him. Finding talents like Shou Zi Chew is a tall order for most Chinese companies expanding overseas – at least for now;

  10. For TikTok Shop merchants in the US, determining the next steps largely depends on their individual risk tolerance;

  11. As for Xiaohongshu/RedNote’s globalisation efforts, there’s still a long long way to go.

The featured image is a screenshot from Trump’s third TikTok video, posted on June 24 last year. In the video, which has 87.9 million views and 8.4 million likes, Trump clearly stated that he would “save” TikTok.