US, China resume talks in Spain on trade, TikTok ban
What's the story
US and Chinese officials are set to meet in Madrid today to discuss long-standing trade tensions. The meeting comes amid a looming divestiture deadline for popular short video app TikTok and calls from Washington for G7 and European allies to impose tariffs on China over its Russian oil purchases. This is the fourth such meeting in four months, with previous ones held in various European cities.
Agreement details
Tentative agreement reached in July meeting
The last meeting in July had resulted in a tentative agreement to extend a trade truce for 90 days. This was aimed at reducing retaliatory tariffs on both sides and resuming the flow of rare-earth minerals from China to the US. However, President Donald Trump has since approved an extension of existing US tariff rates on Chinese goods, totaling approximately 55%, until November 10.
Deadline extension
TikTok divestiture deadline extension likely
The Madrid talks are likely to result in another extension of the TikTok divestiture deadline. ByteDance, the Chinese owner of TikTok, has until September 17 to divest its US operations or face a shutdown. Citing a source familiar with the Trump administration's discussions on TikTok's future, Reuters reported that while a deal is not expected, this public inclusion as an agenda item gives political cover for another extension.
Meeting prospects
Trump-Xi meeting could yield significant 'deliverables'
Former USTR trade negotiator Wendy Cutler, now with the Asia Society Policy Institute in Washington, expects more significant "deliverables" to be saved for a possible meeting between Trump and Chinese President Xi Jinping later this year. This could include a final deal on US national security concerns over TikTok, lifting restrictions on Chinese purchases of American soybeans, and addressing fentanyl-related trade issues.
Economic model
Resolving US economic complaints about China may take years
Cutler also noted that resolving core US economic complaints about China could take years. She said, "Frankly, I don't think China is in any rush to do an agreement where they don't get substantial concessions on export controls and lower tariffs." The Treasury Department has said the Madrid talks will also address joint US-China efforts against money laundering, particularly illicit shipments of technology goods to Russia aiding its war in Ukraine.