U.S. and Chinese officials convened in Madrid on Sunday to tackle a growing list of trade irritants, including a looming deadline for TikTok’s divestiture in the United States, Chinese purchases of Russian oil, and U.S. tariffs—though experts say substantial progress is unlikely.
Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer met with Vice Premier He Lifeng and top trade negotiator Li Chenggang at Spain’s Palacio de Santa Cruz. The meeting represents the fourth encounter in as many months between the two sides as both try to stabilize relations strained by tariffs and export controls.
ByteDance, the Chinese owner of TikTok, faces a September 17 deadline to divest its U.S. operations or face a shutdown. Sources familiar with the discussions say another extension is likely, as the U.S. adds the issue officially to the trade agenda in Madrid.
Including TikTok in the talks provides political cover for the U.S. administration, say observers, as Congress has, bipartisanly, demanded the app’s sale to a U.S. entity to address national security concerns.
The two delegations previously met in Stockholm in July, where they struck a 90-day truce that paused some of the sharp retaliatory tariffs both countries had imposed and restored some critical trade flows, including rare earths. The U.S. has since approved extending those tariff rates until Nov. 10.
One major issue under discussion is U.S. objections to China’s purchase of Russian oil. Treasury officials, including Bessent, are urging the Group of Seven to impose meaningful tariffs on countries that continue buying oil from Russia, calling them part of the funds that sustain Moscow’s war effort.
China’s Ministry of Commerce has said talks in Madrid will cover U.S. tariffs, what it calls the “abuse” of export controls, and the TikTok issue.
Few insiders believe Madrid will produce sweeping breakthroughs. Many are anticipating another extension of the TikTok divestiture deadline. Wendy Cutler, former U.S. trade negotiator, told Reuters there could be “deliverables” saved for an anticipated meeting between President Donald Trump and Chinese President Xi Jinping, perhaps at the Asia-Pacific Economic Cooperation summit in Seoul later this October.
Core issues—such as shifting China’s economic model to emphasize domestic consumption, reducing subsidies for state-owned enterprises, and easing U.S. export controls—are seen as long-term, multiyear challenges. Cutler said she does not expect China to enter into agreements without substantial gains on its terms, especially related to export controls and tariff reductions.
Spain’s government views hosting these talks as a signal of its diplomatic clout. Foreign Minister José Manuel Albares formally welcomed the U.S. and Chinese delegations, and officials say Madrid hopes to solidify its position as a venue for strategic multilateral negotiations—at a moment when its relationships with both Washington and Beijing are under scrutiny.
Meanwhile, Washington’s appeal to the G7 to levy tariffs on buyers of Russian oil reflects a broader strategy to use economic levers as geopolitical tools. The United States has already imposed a 25 percent tariff on Indian goods over the country’s Russian oil purchases. So far, it has refrained from applying similarly punitive measures to Chinese imports, even as concerns mount about Russia’s war financing.
What happens in Madrid is being watched closely—not because dramatic deals are expected, but because small shifts may presage larger ones. Extending deadlines, laying groundwork for upcoming meetings, and reaffirming policies may look modest, but they shape the expectations investors, businesses, and other governments have for U.S.–China trade policy through the remainder of 2025.
Despite the cautious outlook, business leaders are keeping a close watch on how these conversations unfold. Multinational companies with deep exposure to both the U.S. and Chinese markets are pressing for stability, warning that prolonged uncertainty over tariffs, export rules, and digital platforms like TikTok can disrupt supply chains and investment planning. The private sector, while rarely at the center of such high-level diplomacy, is among the most directly affected by the policy swings.
Diplomats note that both Washington and Beijing have an interest in maintaining channels of communication, even if they cannot yet agree on solutions. The simple fact of meeting regularly, they argue, helps prevent miscalculation at a time when global trade is under heavy strain from wars, climate disruptions, and rising protectionism. In Madrid, that emphasis on dialogue over confrontation was seen as a small but tangible achievement.
Looking ahead, much will depend on whether both sides can compartmentalize their disputes—allowing cooperation on shared challenges like climate change and financial stability, while continuing to spar over technology and trade. If the Madrid session is remembered at all, it may be as another careful step in a long diplomatic balancing act, where neither side won concessions but both preserved the fragile framework that keeps talks alive.
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