US-China Close to TikTok Deal as Trade Talks Resume in Madrid

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Photo:Reuters

The United States and China are reportedly moving closer to an agreement over TikTok, the popular short-video app, as top officials resumed talks in Madrid to address wider trade tensions between the two global powers.

Progress and Challenges

U.S. Treasury Secretary Scott Bessent said Monday that while negotiations are making progress, the talks are complex and reaching a full agreement will be difficult. He emphasized that even if a complete deal over TikTok ownership is not immediately finalized, it will not harm broader U.S.-China relations.

Speaking alongside U.S. Trade Representative Jamieson Greer, Bessent highlighted the strong and respectful communication at the highest levels between the two sides. “It’s still very good at the top,” he said. “Ambassador Greer and I have great respect for all counterparts, and discussions remain constructive.”

The current round, the fourth in just four months, is being held at the historic Palacio de Santa Cruz in Madrid, a baroque building that houses Spain’s foreign ministry. Sunday marked the first day of negotiations, lasting about six hours, with no clear breakthrough reported. Officials said that while progress has been made on technical and procedural details, the main issues—like TikTok’s ownership structure and broader trade disputes—remain unresolved.

TikTok and National Security

TikTok, owned by China’s ByteDance, has faced intense scrutiny in the U.S. over national security concerns. Officials have argued that China could access data from TikTok users in the United States, posing a potential risk to privacy and security. The Biden administration and its trade negotiators have repeatedly emphasized that any deal must not compromise national security.

Bessent said, “Our Chinese counterparts have come with a very aggressive ask, but we will not sacrifice national security for a social media app.” The U.S. remains firm that any TikTok agreement must ensure full protection of user data and maintain U.S. oversight.

Greer added that while the TikTok divestment issue is central, it is closely linked to other trade matters. China sees issues such as tariffs, export controls, and long-standing trade measures as part of the potential TikTok deal. “From the Chinese perspective, TikTok is connected to a range of other matters,” Greer said. However, the United States is not in a position to eliminate all measures unconditionally to satisfy China.

History of U.S.-China Trade Tensions

The U.S.-China trade dispute dates back several years and intensified under former President Donald Trump, who imposed tariffs on Chinese imports in a bid to reduce the trade deficit and protect American industries. China retaliated with tariffs on U.S. goods and halted exports of rare earth materials, which are vital for technology manufacturing, including electronics and defense systems.

Since May, delegations led by Bessent and Chinese Vice Premier He Lifeng have met in European cities to try to resolve these issues. A previous meeting in Stockholm in July resulted in a 90-day truce, temporarily reducing tariffs and resuming rare earth exports from China to the U.S.

Experts, however, caution that substantive breakthroughs are unlikely unless President Trump and President Xi Jinping hold a direct one-on-one meeting. William Reinsch, a senior trade adviser, explained, “Setting up a meeting between Trump and Xi is really what these talks are about. Until that happens, progress will be limited.”

Economic and Political Implications

TikTok’s valuation has reportedly exceeded $330 billion, driven by rapid revenue growth. ByteDance, the Chinese parent company, faces a September 17 deadline to divest its U.S. operations or risk a government-mandated shutdown. Extending this deadline will depend largely on the outcome of ongoing talks in Madrid.

China is also seeking easing of U.S. export restrictions on high-tech goods and chips, which are critical for its domestic technology sector. This adds further complexity to the negotiations, as both sides try to balance trade, technology access, and national security concerns.

Bessent is scheduled to travel to London following Madrid to meet with British Finance Minister Rachel Reeves, ahead of President Trump’s state visit to the United Kingdom. These diplomatic efforts highlight how intertwined technology, commerce, and global politics have become, especially in the era of social media and digital platforms.

What Comes Next

Officials from China’s embassy in Madrid indicated that a concluding news conference might be held on Monday afternoon, suggesting the talks could wrap up quickly. However, past negotiations on more complicated issues, such as rare earth shipments in London, have lasted longer, sometimes extending to a third day.

The ongoing discussions demonstrate that while technical details are progressing, major issues remain unresolved. TikTok’s fate in the U.S. could set a precedent for how social media platforms and technology companies are treated in global trade and security negotiations.

As both countries weigh their options, the international business community and tech users worldwide are watching closely. Any decision on TikTok will not only affect the app’s operations but could also influence broader trade policies, tariffs, and global supply chains.

The Madrid talks underscore the delicate balance between commerce, technology, and national security. While a TikTok deal seems closer than before, it is clear that both the U.S. and China are proceeding cautiously. Experts agree that only high-level engagement between Trump and Xi will likely lead to a final resolution. Until then, deadlines, negotiations, and discussions will continue to shape the complex relationship between the world’s two largest economies.

TikTok sale, ByteDance valuation, US-China trade talks