The call, which began at 8 a.m. Washington time, was the first direct exchange between the two leaders in three months.

Earlier this year, Washington threatened to shut TikTok down unless its U.S. operations are transferred from Chinese parent company ByteDance to American ownership. 

Congress set a deadline of January 2025, though Trump has so far avoided enforcing it. He has admitted that banning the app outright could trigger a backlash among its millions of American users.

“I like TikTok; it helped get me elected,” Trump said on Thursday. “TikTok has tremendous value. The United States has that value in its hand because we’re the ones that have to approve it.”

Beijing, however, must sign off on any deal before it moves forward. Sources familiar with the talks say U.S. investors would take over TikTok’s American assets, but ByteDance would continue supplying the algorithm that drives the app’s powerful content recommendations. This unsettles U.S. lawmakers who argue that algorithmic control is inseparable from political influence.

“The platform may be American-owned, but if the algorithm is Chinese, the risk remains,” warned Senator Mark Warner, chairman of the Senate Intelligence Committee.

Trade and technology disputes

The TikTok talks are unfolding against a bigger economic fight. Since returning to office, Trump has raised tariffs on Chinese goods, some to levels not seen in nearly a century. Beijing retaliated with its own restrictions, leaving both economies struggling. 

The U.S. is battling high inflation and a record trade deficit with China, while China’s growth slowed to 4.2% in the second quarter of 2025, its weakest pace since the pandemic.

Despite these pressures, Trump insists he is close to securing better terms with Beijing. “We’re pretty close to a deal,” he said on Thursday, hinting at an extension of current trade terms. Washington is pressing China to buy more U.S. soybeans and Boeing aircraft, while also demanding a crackdown on fentanyl-related chemical exports—an issue the U.S. blames for soaring overdose deaths.

TikTok as leverage

Analysts say Beijing is using TikTok as a bargaining chip while holding back exports of rare-earth materials vital for U.S. technology production. “China’s effective use of sticks (rare earths) and carrots (TikTok) has turned things heavily in their favour,” said Scott Kennedy of the Center for Strategic and International Studies.

Washington, in turn, has restricted China’s access to advanced semiconductor designs, jet engines and specialised chemicals.

Political stakes

For Trump, TikTok represents more than a trade issue. It is also a political tool. Banning the platform risks alienating young voters who use it daily. Allowing it to continue under a restructured deal, however, lets him claim a win on national security without losing a vital channel of communication.

Diplomats are already eyeing a possible face-to-face meeting between Trump and Xi at the Asia-Pacific Economic Cooperation (APEC) summit in South Korea next month. Such a meeting could test whether personal diplomacy can ease one of the most fractious U.S.–China relationships in decades.

Liu Pengyu, spokesperson for the Chinese embassy in Washington, said: “Heads-of-state diplomacy plays an irreplaceable role in providing strategic guidance for China-U.S. relations.”

As a sign of goodwill, Beijing recently allowed Wells Fargo banker Chenyue Mao to leave China after months of travel restrictions. Yet even with gestures like this, the unresolved issues—Taiwan, the South China Sea, and competing economic interests—make it obvious that a single phone call will not erase the deep mistrust between Washington and Beijing.

The tech giant is making this move as global trade tensions, particularly between Washington and Beijing, threaten mineral supplies vital to the production of iPhones, MacBooks, electric vehicles, and even defence systems.

This investment forms part of Apple’s $500 billion commitment to U.S. manufacturing over four years, covering chip production in Arizona, AI server manufacturing in Texas, and now rare earth magnet sourcing from MP Materials.

What’s driving this change in focus is that China’s control of over 85% of the world’s rare earth processing capacity has long been seen as a strategic vulnerability. That risk materialised in April when Beijing imposed new export restrictions on seven key rare earths, due to national security problems. 

By May, global exports of rare earth magnets from China plummeted 74%, forcing tech and automotive sectors to scramble for alternative suppliers.

Apple’s agreement with MP Materials aims to change that narrative. As part of the deal, MP will supply Apple with U.S.-made rare earth magnets from its Texas facility. Commercial magnet production is expected to commence before the end of this year. 

In a sustainability drive, Apple plans to source 100% recycled rare earth magnets from MP’s operations by 2027, using recycled materials processed at Mountain Pass, California.

Beyond Texas, both companies are planning a dedicated recycling plant near MP’s existing mine in Mountain Pass to recover rare earths from industrial scrap and discarded electronics. This aligns with Apple’s earlier move to incorporate 100% recycled rare earths in nearly all magnets within its devices since the iPhone 11’s release.

MP Materials is also benefiting from direct government support. The firm recently secured a multi-billion-dollar agreement with the U.S. Department of Defence, which now holds a $400 million equity stake in the company, making it MP’s largest shareholder. 

Additionally, a $150 million loan will help expand MP’s capacity to separate heavy rare earths. A government-backed price floor of $110 per kilogram for essential minerals like neodymium and dysprosium has also been introduced to encourage domestic production.

“This agreement ensures Apple will have access to vital components without depending on unstable foreign sources,” an Apple spokesperson confirmed. The statement comes as rare earths, including neodymium, praseodymium, dysprosium, and terbium, are still critical for Apple’s devices and global technology infrastructure.

Market reactions were fast as MP Materials’ shares jumped 10% to $52.37 following Apple’s announcement.

By 2027, if Apple’s plans succeed, the rare earth magnets inside its products could be entirely American-made, powered by recycled materials, a major divergence from years of heavy dependence on Chinese processing plants.