Economy

Can US-China Trade Talks Bridge Divides? What’s at Stake for TikTok and Tariffs

US-China trade talks in Madrid address tariffs, TikTok, and oil purchases; no major breakthroughs yet.

September 14, 2025, 7:03 PM

A small sailboat passes in front of a giant cargo ship and cranes at the Port of Oakland

A small sailboat passes in front of a massive China Shipping container vessel under loading cranes at the Port of Oakland. By cdrin / Shutterstock.com.

Executive Summary

US and Chinese officials held trade talks in Madrid, addressing strained bilateral trade relations, the impending divestiture deadline for TikTok, and Washington’s push for allies to impose tariffs on Chinese imports due to Russian oil purchases.

The most anticipated outcome of the talks is another extension for ByteDance to divest TikTok’s US operations, which would be the fourth such extension since President Trump took office.

Beyond direct trade, the discussions also encompassed joint efforts against money laundering, US demands for China to intensify its crackdown on illicit technology shipments to Russia, and US urging G7 allies to impose “meaningful tariffs” on China and India over their purchases of Russian oil.

The Story So Far

The ongoing trade talks between the US and China are driven by a deeply fractured bilateral relationship and an existing trade truce, with President Trump having extended US tariff rates on Chinese goods until November 10. These discussions frequently address the recurring issue of ByteDance’s deadline to divest TikTok’s US operations, which has seen multiple extensions. Additionally, the US is leveraging these talks to exert pressure on China regarding its relationship with Russia, specifically urging a crackdown on illicit technology shipments and encouraging allies to impose tariffs to deter Chinese purchases of Russian oil.

Why This Matters

The ongoing US-China trade talks, despite frequent meetings, are unlikely to yield substantial breakthroughs, signaling a continuation of current trade tensions and tariff rates, which President Donald Trump has already extended. This ongoing uncertainty extends to TikTok’s US operations, expected to receive another divestiture deadline extension, while the US intensifies pressure on China to curb Russian oil purchases and illicit tech shipments, potentially leading to further economic friction and broader geopolitical implications if not addressed.

Who Thinks What?

US officials, including Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer, aim to prevent further deterioration of trade relations, address money laundering, demand China intensify its crackdown on illicit technology shipments to Russia, and advocate for G7 allies to impose tariffs on Chinese and Indian imports to pressure them over Russian oil purchases.

Chinese officials, led by Vice Premier He Lifeng and top trade negotiator Li Chenggang, are committed to continued dialogue on economic and and trade issues, seeking to maintain trade relations despite significant policy divergences.

Trade experts, such as William Reinsch and Wendy Cutler, express skepticism about substantial breakthroughs from the current round of talks, anticipating another extension for TikTok’s divestiture deadline, and suggest more significant deliverables are being reserved for a potential meeting between President Trump and Chinese President Xi Jinping.

US and Chinese officials concluded their first day of trade talks in Madrid on Sunday, addressing a range of complex issues including strained bilateral trade relations, the impending divestiture deadline for the short-video app TikTok, and Washington’s push for allies to impose tariffs on Chinese imports due to its purchases of Russian oil. The negotiations, led by US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer, alongside Chinese Vice Premier He Lifeng and China’s top trade negotiator Li Chenggang, lasted approximately six hours.

Ongoing Dialogue Amidst Tensions

These discussions mark the fourth time in as many months that delegations from both nations have convened in European cities, an effort to prevent further deterioration of the fractured US-China trade relationship. Their previous meeting in Stockholm in July saw an agreement in principle to extend a trade truce for 90 days.

President Donald Trump has since approved the extension of current US tariff rates on Chinese goods, which are now set to remain in place until November 10.

TikTok Divestiture and Limited Breakthroughs

Trade experts express skepticism regarding the likelihood of any substantial breakthrough from the current round of talks. The most anticipated outcome is another extension of the deadline for ByteDance, TikTok’s Chinese parent company, to divest its US operations.

A source familiar with the discussions indicated that this would mark the fourth extension of the deadline since President Trump took office. Experts like William Reinsch and Wendy Cutler suggest that more significant deliverables are likely being reserved for a potential one-on-one meeting between President Trump and Chinese President Xi Jinping.

Broader Economic and Security Concerns

Beyond direct trade issues, the US Treasury Department confirmed that the talks also encompassed joint US-Chinese efforts to combat money laundering. This included specific demands for China to intensify its crackdown on illicit technology shipments to Russia.

US Treasury Secretary Bessent has been actively urging G7 allies to impose “meaningful tariffs” on imports from both China and India. The objective is to exert pressure on these nations to cease their purchases of Russian oil, a measure discussed and agreed upon for accelerated action by G7 finance ministers.

Outlook for Continued Engagement

China’s Ministry of Commerce stated that the talks would broadly cover economic and trade issues, without offering specific details. The negotiations are scheduled to resume on Monday, indicating a continued commitment from both sides to maintain dialogue despite the significant policy divergences.