WASHINGTON (Reuters) -U.S. President Donald Trump said he and Chinese President Xi Jinping made progress on a TikTok agreement and would meet face-to-face in six weeks in South Korea to discuss trade, illicit drugs and Russia's war in Ukraine.

The two sides appeared to lower tensions during the first call in three months between the leaders of the two superpowers, but it was not immediately clear that the call had yielded the firm agreement that had been expected over the fate of the popular short-video app.

The leaders did agree to further talks on the sidelines of the Asia-Pacific Economic Cooperation forum that starts on October 31 in Gyeongju, South Korea.

Trump also said he would visit China early next year and that Xi would come to the U.S. at a later date. Reuters previously reported that the two sides were planning such a meeting.

"He approved the TikTok deal," Trump told reporters in the Oval Office, adding that there could remain a formal signing of the agreement. "The TikTok deal is well on its way."

Trump also suggested positive movement on trade, fentanyl and the Russia-Ukraine war during the call, which he said lasted about two hours.

"I believe he would like to see it ended," Trump said of Xi's view of the Russia-Ukraine war.

Beijing's final approval of a framework deal reached by the two sides this week is one of the hurdles Trump needed to clear to keep TikTok open. Congress had ordered the app shut down for U.S. users by January 2025 if its U.S. assets were not sold by Chinese owner ByteDance.

China's statement made no reference to a formal agreement on TikTok. Trump had signaled multiple times this week that a deal might be forthcoming.

"China's position on the TikTok issue is clear: The Chinese government respects the wishes of the company in question," the government said in a statement that called for non-discriminatory treatment of its companies.

"The U.S. will work with China on the economy and trade, and support their teams in reaching a proper deal on TikTok through consultation."

The White House and the Chinese government did not immediately respond to requests for further comment.

"Beijing is banking on optics and time, while Washington is chasing a TikTok headline and a summit, and hopes, I think, for more wins later," said Craig Singleton, a senior fellow at the Foundation for Defense of Democracies, a think tank. "I think the Chinese are very happy with the current dynamic."

Early on Saturday, ByteDance issued a statement thanking Trump and Xi "for their concern for TikTok", adding that it would work towards a way of continuing to serve U.S. users that satisfied Chinese legal requirements.

In Shanghai some residents expressed scepticism about the Trump administration's sincerity in improving relations between the two countries.

"I don't really believe the U.S. wants a 'win-win' situation," said Lin Jinqi, 22. "It seems like (the U.S.) just wants to be the boss.

"So in many areas, they deliberately set up obstacles for China," he said. "We don't go looking for trouble, but we're not afraid of it either."

REMAINING NATIONAL SECURITY CONCERNS

Trump has declined to enforce the TikTok law while his administration looks for a new owner, but also because he worries a ban on the app would anger TikTok's huge user base and disrupt political communications.

Key questions about the deal remain. They include the precise ownership structure of the company, how much control China will retain over the app's inner workings, what concessions Trump will demand from the parties involved or whether Congress will approve.

"It's all being worked out," Trump told reporters, responding to a question over whether the United States or China would have control over the app's algorithm. "We're going to have very tight control."

Asked whether the U.S. government would control a board seat, Trump said, "We're going to announce it."

He also floated the possibility that the U.S. government might take a fee for helping broker a deal to keep TikTok online, but added that such a provision "hasn't been fully negotiated." The Wall Street Journal has reported it would be a multibillion-dollar fee.

The deal would transfer TikTok's U.S. assets to U.S. owners from ByteDance, Reuters has reported. Sources familiar with the deal said U.S. TikTok would still make use of ByteDance's algorithm.

The arrangement worries lawmakers who think Beijing could spy on Americans or conduct influence operations through the app. China has said there is no evidence of a threat posed by the app.

TRUMP TARIFFS TARGET CHINA'S EXPORT ECONOMY

Since retaking office in January, Trump has sharply hiked tariffs across the board and singled out China's export-oriented economy with especially punitive rates. That prompted China to respond in kind. Tariff rates on both sides of the Pacific rose to triple-digit percentages in April.  

A succession of limited agreements since May paused the tit-for-tat tariff war between the countries.

Taxes on U.S. importers have been a key plank of Trump's economic policy. He's raised them to the highest levels in nearly a century while positioning his foreign policy approach as one of peace-seeking and deal-making. 

The Republican has portrayed tariffs as a way to recoup lost manufacturing jobs, cut chronic federal government deficits, correct perceived trade imbalances and bend foreign countries to Washington's will. Many economists regard across-the-board tariffs as inefficient, raising consumer prices and limiting their choices.

Despite the tariffs, China remains America's third-largest trading partner and the source of its largest bilateral trade deficit in goods. Recent data point to slowing economies in both China and the United States.

Trump has threatened but so far withheld punitive tariffs against Chinese exports related to the country's purchases of Russian oil.

At the same time, regional worries are multiplying over Taiwan and the South China Sea, risky flashpoints that struggle to command as much attention in Washington as the Russia-Ukraine and Gaza wars.

Neither country's statements following the call mentioned Taiwan.

Other key issues include U.S. demands that China crack down on the export of fentanyl-related chemicals, a cause of U.S. overdose deaths. Beijing has accused Washington of distorting the issue.