The United States and China are holding a second day of high-stakes trade talks in Madrid, Spain, as the world’s two biggest economies try to ease months of tension.
The discussions are led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, who spent six hours negotiating on Sunday. Talks are expected to run through Wednesday and are aimed at finding common ground after months of tit-for-tat tariffs and disputes.
The meetings come at a critical time. US President Donald Trump has been urging NATO allies to impose tariffs of up to 100% on Chinese goods to pressure Beijing to reduce its purchases of Russian oil — a key source of revenue for Moscow as it continues its war in Ukraine. Trump has already raised tariffs on Indian goods to 50% but has not yet taken similar action against China.
Chinese Foreign Minister Wang Yi pushed back over the weekend, warning that sanctions and tariffs would only make the Ukraine conflict more complicated.
Adding to the tension, China’s Ministry of Commerce has opened two new investigations into the US chip industry after Washington added 23 more Chinese companies to its restricted trade list.
Another major issue on the table is the looming US deadline for Chinese tech giant ByteDance to sell TikTok or face a ban. The deadline, already extended three times by Trump, expires Wednesday. Analysts say a breakthrough on TikTok could be used as a confidence-building measure ahead of a possible meeting between Trump and Chinese President Xi Jinping, potentially at the APEC summit in South Korea next month.
Under the current truce, the US has reduced tariffs on Chinese goods to 30%, while China is charging a 10% levy on American goods. However, a full trade deal remains elusive.
Experts believe both countries have strong leverage. China holds control over rare earth minerals and major manufacturing capacity, while the US offers a market China cannot easily replace. Many analysts expect that some tariffs will eventually be lowered within a year to ease inflation pressures in the US.
Trade experts also warn that failure to reach a deal could escalate tensions further, with risks for global supply chains, technology markets, and the already fragile global economy.
