US-China Trade Talks Convene in Madrid amid Rising Stakes

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Diplomatic negotiations between the United States and China began on Sunday in Madrid, where senior officials from both nations are discussing trade tensions, national security concerns, and the contentious dispute over TikTok. The US delegation is led by Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer. China’s side is headed by Vice Premier He Lifeng and top trade negotiator Li Chenggang. Talks are expected to run through to Wednesday, taking place in Spain’s Palacio de Santa Cruz.

Tariffs dominate much of the agenda. Both countries still impose steep duties on imports from the other, and a fragile truce from recent months has eased them only partially. Washington, however, is pressing for further concessions, especially in technology, export controls and high-value goods. China has pushed back, criticising some US proposals as overreaching and accusing Washington of coercive tactics.

TikTok Deadline Looms, Deal Possible but Conditional

US demands include that ByteDance, owner of TikTok, divests its US operations by an approaching deadline or faces a ban. That deadline, set for 17 September, may be extended yet again, given ongoing negotiations. US officials say technical progress has been made but major hurdles remain. China has tied its willingness to agree to divestment to broader trade and tech-related demands. US leaders remain firm: national security cannot be compromised.

Other flashpoints include China’s import of Russian oil and Washington’s pressure on its allies to impose secondary tariffs on Chinese imports tied to that trade. China has denounced those moves as unilateral bullying. Also under scrutiny: US export controls, China’s regulatory actions (such as investigations of foreign tech firms), and supply chain stability of rare earths and semiconductor components.

Outlook

Both sides appear ready to compromise on details rather than overhaul their positions. Any wider breakthrough likely depends on a possible meeting between Presidents at the highest level. For now, markets, companies and governments worldwide are watching closely. Extension of deadlines, incremental tariff relief, and firm declarations on tech regulation seem probable.