Officials from the United States and China met in Madrid on Monday for a second day of talks on extending a truce in President Trump’s trade war and deciding the future of TikTok in America.
Treasury Secretary Scott Bessent said that the two sides had agreed to a “framework” for a deal to divest TikTok from its Chinese owner, ByteDance. President Trump and China’s top leader, Xi Jinping, are set to speak on Friday to approve the deal, which Mr. Bessent described as an agreement between “two private parties” and would shift the social app into U.S.-controlled ownership.
Mr. Bessent and Jamieson Greer, the U.S. trade representative, led the negotiations on behalf of the United States, and He Lifeng, the vice premier for economic policy, led the talks for China. It was the fourth round of talks on tariffs, trade and other issues.
The talks also focused on the future of TikTok: Mr. Trump has until Wednesday to enforce or delay a law requiring TikTok to be separated from its Chinese owner or face a ban in the United States. Mr. Bessent said that the Chinese side had “very aggressive asks” on TikTok, as he headed into talks on Monday morning.
The president has already delayed enforcing the law three times. Congress passed the bipartisan legislation last year to ban TikTok in the country unless it found a non-Chinese owner because of concerns that the social media app’s ties to China made it a national security threat to the United States.
The talks lasted more than six hours on Sunday and about five hours on Monday. Mr. Bessent plans to join Mr. Trump for a state visit in London on Wednesday.
Officials from countries around the world have been working to reach trade deals with the United States since April, when Mr. Trump imposed “reciprocal” tariffs on virtually all of America’s trading partners.
Talks with China have been more complicated. Mr. Trump imposed 145 percent tariffs on Chinese imports in April, essentially halting trade, before lowering that levy to 30 percent. China put 10 percent tariffs on American products.
The latest pause on U.S. tariffs placed on imports from China is scheduled to expire in November. Mr. Bessent said that the Americans and Chinese would continue to negotiate, holding talks “in about a month in a different location.”
Mr. Trump’s tariffs have added pressure on U.S. inflation, which remains elevated. The Federal Reserve is expected to cut interest rates this week, a move intended to encourage economic growth, but one can also lead to accelerating inflation.
In a growing escalation of tensions between Washington and Beijing, the U.S. Commerce Department said on Friday that it was adding Chinese chip companies to a trade blacklist. The moves are expected to put additional pressure on the talks. The following day, China announced that it was opening an investigation into exports of certain microchips that are made in the United States. And on Monday, a Chinese regulator said Nvidia, the leading maker of A.I. chips, had violated the country’s antitrust law. Mr. Bessent said that the “poor timing” of the action against Nvidia was discussed at the Madrid meeting on Monday.
The world’s two largest economies have been discussing further tariff reductions and the status of China’s restrictions on shipments of rare earth minerals and magnets critical to U.S. manufacturers. The Trump administration is also concerned that China has stopped buying American agricultural products, threatening the livelihood of soybean farmers.
Mr. Trump and Xi Jinping, China’s leader, could meet next month at the Asia-Pacific Economic Cooperation forum in South Korea. Mr. Trump has also suggested that he may visit China at some point at Mr. Xi’s invitation.
The latest round of talks took place shortly after Mr. Xi gathered leaders of more than 20 countries in China last month in a show of Beijing’s efforts to reshape a global order without the United States at the center. Mr. Trump’s hardball tactics in trade negotiations have created a rift with allies like India, which has been the target of Mr. Trump’s heavy import tariffs, creating an opportunity for China to push for a closer relationship.
China is relying on increased trade with other countries to offset a sharp decline in exports to the United States, which have dropped about 15 percent this year. But China’s trade to Southeast Asia, Africa and other regions is booming, and it is on pace to surpass last year’s record nearly $1 trillion trade surplus in 2025.
Despite the robust trade figures, there are signs that China’s domestic economy is feeling the pinch from the trade war. Data releases on Monday showed that retail sales and industrial output in the country slowed in August, both hitting their lowest growth rates so far this year.
The Chinese government is discouraging companies from further investments in industries already suffering from overcapacity, like electric vehicles, to prevent cutthroat price competition and ease concerns from trading partners that the deluge of inexpensive Chinese-made exports will decimate local manufacturing.
Daisuke Wakabayashi contributed reporting from Seoul and Sapna Maheshwari from New York.
Alan Rappeport is an economic policy reporter for The Times, based in Washington. He covers the Treasury Department and writes about taxes, trade and fiscal matters.
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