The United States and China resumed high-stakes trade negotiations in Madrid on Monday, with delegations working to resolve two of the most contentious issues in the bilateral relationship: the potential TikTok ban and escalating tariff disputes between the world’s two largest economies.
US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are leading their respective teams in talks that began Sunday and are expected to continue through Wednesday at Spain’s foreign ministry headquarters. The negotiations come as a critical September 17 deadline approaches for TikTok’s Chinese parent company ByteDance to either sell its US operations or face a complete ban in America.
Trade tensions between Washington and Beijing have been particularly volatile in 2025, with tit-for-tat tariffs reaching triple-digit levels earlier this year before both sides agreed to a temporary rollback. Currently, the US maintains 30 percent tariffs on Chinese goods while China imposes 10 percent duties on American exports, but this fragile truce is set to expire in November.
Treasury Secretary Bessent indicated on Monday that the US and China have reached a preliminary framework for resolving the TikTok dispute, stating that commercial terms have been agreed upon. However, Chinese negotiators reportedly entered the talks with what US officials described as aggressive demands and a fundamental misunderstanding of the American position on the social media platform.
The TikTok negotiations have become increasingly complex, with reports suggesting a potential deal would involve an investor consortium including software giant Oracle taking control of TikTok’s US operations. Under the proposed arrangement, American users would migrate to a new app that recreates the platform’s content-recommendation algorithms while maintaining separation from Chinese oversight.
President Trump has already extended the TikTok enforcement deadline four times since taking office, most recently pushing it back to December 16 through an executive order signed Tuesday. The president is scheduled to discuss the TikTok issue directly with Chinese President Xi Jinping on Friday, potentially setting the stage for a broader diplomatic breakthrough.
The Madrid talks occur against a backdrop of heightened technological competition, with China launching new investigations into the US semiconductor industry over the weekend. Beijing opened an anti-dumping probe into American integrated circuit chips and initiated a separate investigation into alleged US discrimination against Chinese chip manufacturers. Additionally, Chinese authorities announced that US company Nvidia has been found guilty of violating Chinese anti-monopoly laws, with investigations continuing.
Both delegations are maintaining measured expectations for the Madrid negotiations. Unlike their American counterparts, Chinese officials typically avoid confirming details before agreements are finalized. However, Beijing has attempted to project strength during the talks, with the commerce ministry issuing statements opposing US calls for G7 and NATO nations to impose secondary sanctions on China over its purchase of Russian oil.
The economic stakes are significant for both nations. Recent Chinese economic data from August showed concerning weakness, with industrial output rising just 5.2 percent year-over-year – the worst measure of factory activity for 2025. Retail sales growth of only 3.4 percent also missed expectations, underscoring the pressure on Beijing to maintain access to American markets.
The negotiations could lay groundwork for a potential summit between Trump and Xi Jinping later this year, marking a crucial test of whether the two superpowers can manage their economic rivalry without triggering a broader decoupling of their interconnected economies. Success in Madrid would provide both leaders with political victories while failure could reignite the trade war that has periodically disrupted global supply chains and economic growth.