World

China and US Officials Meet in Madrid: Can Talks Ease Trade Disputes and TikTok’s Fate?

US and China officials met in Madrid, discussing trade, security, and TikTok. No major breakthrough is expected.

September 14, 2025, 6:33 PM

U.S. Treasury Secretary Scott Bessent looks up as he speaks, with a green background

U.S. Treasury Secretary Scott Bessent speaks to reporters after an interview at the White House. By DT phots1 / Shutterstock.com.

Executive Summary

American and Chinese officials are holding high-level talks in Madrid to address strained relations, focusing on trade disputes, national security, and the future of TikTok, amid persistent tariff pressures initiated under President Donald Trump’s administration.

Ahead of the talks, China launched two investigations targeting the US semiconductor industry, accusing US export curbs and tariffs of suppressing China’s high-tech development, following the US adding 23 Chinese firms to an “entity list.”

Trade analysts anticipate a low probability of a major breakthrough in Madrid, but potential outcomes include an extension for TikTok’s divestment deadline and discussions on combating money laundering and illicit technology shipments to Russia.

The Story So Far

The ongoing high-level talks between American and Chinese officials are a direct response to a deeply strained bilateral relationship, characterized by persistent trade disputes and tariffs initiated under President Donald Trump’s administration. These discussions are further complicated by escalating tensions in the semiconductor sector, where both nations have recently imposed restrictions and launched investigations against each other’s industries, yet they also reflect a continued effort to manage and de-escalate friction following previous agreements like a recent trade truce.

Why This Matters

The ongoing high-level US-China talks, despite low expectations for a major breakthrough, underscore the persistent and multifaceted tensions stemming from trade tariffs initiated under President Donald Trump and escalating semiconductor disputes. The potential outcomes, ranging from a further extension for TikTok’s divestment to continued tech-sector investigations, indicate a prolonged period of strategic competition that could impact global supply chains, technological innovation, and the operational landscape for major multinational corporations.

Who Thinks What?

The United States aims to mitigate deterioration in its strained relationship with China, continuing tariff pressures initiated under President Trump’s administration, imposing export curbs on Chinese firms for national security, and pressing China on combating money laundering and illicit technology shipments to Russia.

China views US export curbs and tariffs as “containment and suppression” of its high-tech industries, initiating anti-dumping and anti-discrimination investigations into the US semiconductor sector, while also seeking to mitigate deterioration in relations and reduce retaliatory tariffs.

Trade analysts suggest a low probability of a major breakthrough in the Madrid talks, anticipating a potential outcome could be another extension of the deadline for TikTok’s parent company, ByteDance, to divest its US operations.

American and Chinese officials have convened in Madrid for a series of high-level talks addressing a range of critical issues, including ongoing trade disputes, national security concerns, and the contentious future of the social media platform TikTok. These discussions, marking the fourth such engagement in recent months, aim to mitigate further deterioration in the strained relationship between the two global powers, particularly amid persistent tariff pressures initiated under President Donald Trump’s administration.

High-Level Delegations and Prior Agreements

The Chinese delegation in Madrid is led by Vice Premier He Lifeng, who is scheduled to meet with United States Treasury Secretary Scott Bessent between Sunday and Wednesday. US Trade Representative Jamieson Greer is also participating in these crucial negotiations.

These senior officials, alongside China’s top trade negotiator Li Chenggang, previously met in Stockholm in July. That meeting resulted in an agreement in principle to extend a trade truce for 90 days, which significantly reduced retaliatory tariffs and facilitated the resumption of rare-earth mineral flows from China to the US.

Escalating Tensions in the Semiconductor Sector

Ahead of the Madrid talks, China initiated two investigations targeting the US semiconductor industry. The Ministry of Commerce in Beijing launched an anti-dumping probe into specific analog IC chips imported from the US, focusing on commodity interface IC chips and gate driver IC Chips using 40-nanometer and above process technologies.

Concurrently, the Chinese commerce ministry announced an anti-discrimination investigation into US measures affecting China’s chip sector. These probes follow the US decision on Friday to add 23 Chinese firms to an “entity list,” imposing curbs on businesses allegedly acting against US national security and foreign policy interests. Among these are two Chinese companies accused of acquiring chipmaking equipment for the Chinese chipmaking giant SMIC.

A Chinese commerce ministry spokesperson stated on X that US export curbs and tariffs “constitute the containment and suppression of China’s development of high-tech industries” such as advanced computer chips and artificial intelligence.

Outlook for Madrid Talks and Key Discussion Points

Trade analysts suggest a low probability of a major breakthrough in the Madrid talks, which are being hosted by Spanish Prime Minister Pedro Sanchez in an effort to enhance Spain’s relations with China. Reports indicate that a potential outcome could be another extension of the deadline for TikTok’s parent company, ByteDance, to divest its US operations, currently set for September 17, to avoid a potential closure in the country.

The US Treasury confirmed that the discussions in Spain would also encompass joint efforts from Washington and Beijing to combat money laundering. The US has additionally pressed China for a stronger crackdown on illicit shipments of technology goods to Russia, which are believed to be aiding its military efforts in Ukraine.