China and the United States commenced a new round of trade talks in Madrid on Sunday. These US-China trade talks aim to resolve the dispute over TikTok and address tariffs imposed by President Donald Trump. The Chinese delegation, including Vice Premier He Lifeng, will be in Madrid until Wednesday, meeting with the US delegation headed by Treasury Secretary Scott Bessent. The meetings are taking place at the Palacio de Santa Cruz, the Spanish Ministry of Foreign Affairs headquarters.
Trade Tensions and Tariff Reductions
The year 2025 has seen fluctuating trade tensions between Beijing and Washington. Both sides implemented escalating tariffs, reaching triple digits at one point, significantly disrupting global supply chains. Subsequently, an agreement was reached to de-escalate the situation. This resulted in a temporary reduction of tariffs to 30 percent for the US and 10 percent for China. In August, the reimposition of higher tariffs was delayed for 90 days, extending the pause until November 10. China’s Xinhua news agency reported on the talks, stating that the Chinese and US delegations met to discuss economic and trade issues.
TikTok Dispute and Semiconductor Investigations
A major point of discussion during the Madrid meetings is the dispute surrounding the social media platform, TikTok. China appealed to the US on Friday to resolve the matter through dialogue. The deadline for TikTok to secure a non-Chinese buyer or face a US ban is September 17, after President Trump granted a third extension. This action follows a federal law mandating the sale or ban of TikTok on national security grounds, originally scheduled to take effect before Trump’s January inauguration. China’s commerce ministry urged Washington to engage in respectful dialogue and find a mutually agreeable solution. Adding to the complexities, China initiated two investigations into the US semiconductor sector on Saturday. One investigation focuses on potential anti-dumping practices regarding certain US-originating IC chips, while the other examines potential discrimination against the Chinese chip industry.
Senior Chinese trade negotiator Li Chenggang emphasized the need for equal dialogue and consultation between China and the United States, following a visit to Washington in August. The US-China trade truce has been fragile, with the US alleging that China violated their agreement and slowed export license approvals for rare earths. China’s position as the world’s primary rare earth producer makes this a significant issue. Rare earths are critical materials in many sectors, including automotive, electronics, and defense.
Background
High-level discussions between diplomats and defense chiefs from both nations took place on Wednesday, potentially paving the way for a summit between President Trump and Chinese leader Xi Jinping. President Trump expressed optimism in August regarding a potential visit to China, noting improvement in economic ties between the two countries. The US and China have been engaged in a series of trade negotiations in an effort to resolve various trade disputes and reduce tensions between the two nations. These talks are a part of a broader, ongoing effort to manage and resolve trade disputes.
What’s next
The US and China have engaged in a series of back-and-forth actions regarding tariffs and trade. The current round of talks in Madrid aims to find solutions for the TikTok dispute and address lingering issues related to tariffs and other trade concerns. The outcome of these meetings will play a crucial role in shaping the future of US-China trade relations and broader geopolitical dynamics between the two countries. The temporary reprieve on increased tariffs suggests a willingness to find common ground, but substantial challenges remain in achieving a lasting trade agreement.
- US and China held talks in Madrid to address trade disputes.
- Discussions included the TikTok dispute and tariffs.
- China launched investigations into the US semiconductor sector.
- The temporary tariff reduction is in effect until November 10.
- High-level diplomatic and defense discussions have taken place.
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