*

Trump, Xi hold first call since June

*

TikTok deal on top of agenda

*

U.S. Congress ordered app shutdown absent sale

*

US-China ties remain strained despite successive trade

talks

By Trevor Hunnicutt

WASHINGTON, Sept 19 (Reuters) - Presidents Donald Trump

and Xi Jinping spoke by phone on Friday, Chinese state media and

a U.S. official said, as they seek an agreement to help keep the

video app TikTok online in the U.S. and ease tensions between

two superpowers locked in a standoff over trade.

A possible deal was at the top of the agenda alongside trade

for the leaders' first known call in three months, which began

at 8 a.m. Eastern time (1200 GMT), the official said.

The report from Chinese state broadcaster CCTV did not

provide any details of the conversation and the White House did

not immediately respond to a request for comment.

Trump and Xi's effort to steady relations coincides with

discussions on a potential in-person summit between Xi and Trump

during the Asia-Pacific Economic Cooperation (APEC) summit in

South Korea on October 30-November 1, Reuters has reported.

Beijing's final approval of a framework deal reached by the two

sides earlier 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 weren't

sold by Chinese owner ByteDance.

Trump has declined to enforce the 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.

"I like TikTok; it helped get me elected," Trump said

during a press conference 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."

Key questions about the deal remain. It's not clear the

precise ownership structure of the company, how much control

China will retain or whether Congress will approve.

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.

That arrangement worries lawmakers concerned that Beijing could

spy on Americans or conduct influence operations through the

app. China has said there is no evidence of a national security

threat posed by the app.

TRUMP HAS A LIST OF DEMANDS

Trump has positioned his foreign policy approach as one of

peace-seeking and deal-making. Relations remain icy between the

world's two biggest economies.

"We're pretty close to a deal," Trump said on Thursday, in

an apparent reference to larger trade talks. "We may do an

extension with China, but it's an extension based on the same

terms that we have right now, which are pretty good terms."

Other key issues include competition between both sides on

semiconductors and other advanced technologies. The U.S. wants

more Chinese purchases of U.S.-harvested soybeans and Boeing ( BA )

airplanes.

The U.S. is also demanding that China crack down on the

export of fentanyl-related chemicals, a major cause of U.S.

overdose deaths. Beijing has accused Washington of distorting

the issue.

Recent data point to slowing economies in both China and the

United States.

Since retaking office in January, Trump 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.

They also set aside issues that led to China choking off

rare-earth magnets that Washington needs to make high-tech

gadgets. Trump had blocked Beijing's access to semiconductor

design software, jet engines and some chemicals.

"China's effective use of sticks (rare earths) and carrots

(TikTok) has turned things heavily in their favor," said Scott

Kennedy, head of the Chinese Business and Economics program at

the Center for Strategic and International Studies, a think

tank.

Tariffs, a tax 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.

The Republican has portrayed tariffs as an elixir that can

recoup lost manufacturing jobs, cut chronic federal government

deficits, correct perceived trade imbalances and bend foreign

countries to Washington's will.

Despite the tariffs, China remains the U.S.' third-largest

trading partner and the source of its largest bilateral trade

deficit in goods.

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.

"Heads-of-state diplomacy plays an irreplaceable role in

providing strategic guidance for China-U.S. relations," said Liu

Pengyu, spokesperson for the Chinese embassy in Washington.

In an early sign of goodwill prior to the call, China permitted

the departure of Wells Fargo ( WFC ) banker Chenyue Mao, who had

been prevented from returning to the United States for several

months.