• Negotiators are "very close" to an agreement that would see TikTok sold to a non-Chinese owner, potentially averting a US ban.
  • A temporary tariff truce remains in place, with US duties on Chinese goods at 30% and Chinese duties at 10% until at least November 10.
  • The outcome sets the stage for a potential summit between leaders Trump and Xi Jinping, though underlying frictions persist.

A Potential Breakthrough on TikTok

A Chinese delegation led by Vice Premier He Lifeng is set to address the media in Madrid at 1500 GMT, following intensive trade talks with a US team headed by Treasury Secretary Scott Bessent. According to people familiar with the matter, the most significant progress has been made on the fate of TikTok, with Treasury officials signaling the parties are very close to a resolution that would involve the app's sale, thus avoiding a US ban slated for September 17.

The high-level discussions, which began on Sunday and concluded Wednesday, aimed to de-escalate a protracted trade conflict marked by tit-for-tat tariffs and accusations of unfair practices. The potential TikTok deal is viewed as a critical step in easing a major point of tension rooted in US national security concerns.

Tariff Truce Holds Amid Chip Tensions

While the TikTok negotiations have taken center stage, the broader tariff war remains a complex backdrop. The two economic giants agreed earlier this year to a temporary reduction from triple-digit peaks, pausing further increases until November 10. US tariffs on Chinese goods currently stand at 30%, while Chinese retaliatory duties are at 10%. This fragile truce has provided some relief to global supply chains, particularly in the electronics sector, though businesses continue to operate under a cloud of uncertainty.

Efforts to reach a broader, lasting agreement on tariffs and US export controls targeting China’s technology sector have proven more difficult. The talks were further complicated by China’s recent launch of investigations into the US semiconductor sector, a move seen by analysts as a strategic counter-punch. A spokesperson for the Chinese delegation did not immediately respond to a request for comment on the investigations.

Setting the Stage for a Trump-Xi Summit

The progress in Madrid is widely seen as laying the groundwork for a high-profile meeting between President Trump and President Xi Jinping. A successful resolution on TikTok and a maintained tariff pause could temporarily stabilize bilateral relations, which have been strained by deep-seated mistrust and competing technological ambitions.

However, the recent escalations suggest that even with a deal, underlying frictions are likely to persist. The US law mandating TikTok’s divestment is set to trigger just before January’s US presidential inauguration, adding a layer of political urgency to the negotiations. The outcome of these talks will have significant consequences not only for millions of TikTok users but for the broader trajectory of global tech and trade policy.