US-China Trade Tensions

September 16th, 2025
Dhruv Arun

China launched two probes targeting the U.S. semiconductor sector Saturday ahead of talks between the two nations in Spain this week on trade, national security and the ownership of social media platform TikTok. China’s Ministry of Commerce announced an anti-dumping investigation into certain analog IC chips imported from the U.S. The ministry separately announced an anti-discrimination probe into US measures against China’s chip sector.

The announcements came just one day after the US added 23 Chinese companies to an “entity list” of businesses that will face restrictions for allegedly acting against US national security and foreign policy interests. The list includes two Chinese companies accused of acquiring chipmaking equipment for the major Chinese chipmaker SMIC. US Treasury Secretary Scott Bessent is set to meet Chinese Vice Premier He Lifeng in Madrid between Sunday and Wednesday.

The meetings will be the latest in a series of negotiations aimed at reducing trade tensions and postponing the enactment of higher tariffs on each other’s goods. US and Chinese counterparts previously held discussions in Geneva in May, London in June and Stockholm in July. The two governments have agreed to several 90-day pauses on a series of increasing reciprocal tariffs, staving off an all-out trade war.

For two months, Chinese diplomats have courted the White House, hoping to lock in a visit by President Trump to China that would grant leader Xi Jinping a significant diplomatic victory, according to people familiar with the matter. In return, the U.S. administration has straightforward demands, the people said: tangible concessions, or “deliverables,” from Beijing on everything from trade to TikTok.

US and Chinese officials began talks in Madrid on Sunday on their strained trade ties, a looming divestiture deadline for Chinese short video app TikTok, and Washington’s demands that its allies place tariffs on China over its purchases of Russian oil. The talks mark the fourth time in four months that the delegations have met in European cities to try to keep a fractured US-China trade relationship from collapsing under President Donald Trump’s tariffs.

The delegations last met in Stockholm in July, where they agreed in principle to extend for 90 days a trade truce that sharply reduced triple-digit retaliatory tariffs on both sides and restarted the flow of rare-earth minerals from China to the United States. Trump has approved the extension of current U.S. tariff rates on Chinese goods, totaling about 55%, until November 10, 2025.

The most likely result of the Madrid talks is seen as another extension of a deadline for the popular TikTok app’s Chinese owner, ByteDance, to divest its U.S. operations by September 17 or face a U.S. shutdown. A source familiar with the Trump Administration’s discussions on TikTok’s future said that a deal was not expected, but that the deadline would be extended for a fourth time since Trump took office in January.

Wendy Cutler, a former USTR trade negotiator, said she expected more substantial “deliverables” to be saved for a potential meeting between Trump and Chinese President Xi Jinping later this year, perhaps at an Asia Pacific Economic Cooperation (APEC) Summit in Seoul at the end of October. Cutler said these may include a final deal to resolve US national security concerns over TikTok, a lifting of restrictions on Chinese purchases of American soybeans and a reduction of fentanyl-related tariffs on Chinese goods, and the Madrid discussions may help lay the groundwork for such a meeting.

The Treasury has said the Madrid talks would also cover joint U.S.-Chinese efforts to combat money laundering, a reference to demands that China clamp down on illicit shipments of technology goods to Russia that aid its war in Ukraine. Bessent urged Group of Seven (G7) allies to impose “meaningful tariffs” on imports from China and India to pressure them to stop buying Russian oil, a move aimed at bringing Moscow into Ukraine peace negotiations by curbing its oil revenues.

Spain’s Foreign Minister, José Manuel Albares, publicly greeted the two delegations before the start of talks. A Spanish government source said the choice of Spain for the latest round of the “delicate” talks was evidence that Madrid was consolidating itself as a seat of high-level and strategic negotiations.