US, China talk trade amid threats over Russian oil, TikTok ban | International Trade News

The United States and China are set to hold a second day of trade talks in Spain amid efforts to de-escalate tensions between the world’s two largest economies.

US and Chinese officials will meet at the Santa Cruz Palace in Madrid on Monday in their latest bid to reach a comprehensive trade deal after months of tit-for-tat trade salvoes between the sides.

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Officials, led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, held about six hours of talks on Sunday.

The talks, which are scheduled to run until Wednesday, come as relations between Washington and Beijing continue to be roiled by differences on trade, including China’s purchase of Russian oil.

President Donald Trump’s administration has been pushing US allies to impose steep tariffs on China and India over their purchases of Russian oil in a bid to pressure Russia to end its war in Ukraine.

In a social media post over the weekend, Trump said NATO countries should impose tariffs of up to 100 percent on Chinese goods until the war is brought to an end.

“China has a strong control, and even grip, over Russia, and these powerful Tariffs will break that grip,” Trump said on his Truth Social platform.

Trump has already raised the tariff rate on Indian goods to 50 percent to push New Delhi away from Moscow, but he has so far not targeted China over its oil purchases.

Chinese Foreign Minister Wang Yi on Saturday appeared to hit out at Washington’s efforts to punish countries buying Russian oil, saying sanctions would only “complicate” the situation in Ukraine.

Wang’s comments came as China’s Ministry of Commerce launched two new investigations of the US chip sector, a day after the US Department of Commerce added 23 more Chinese entities to its restricted trade list.

The talks in Spain also come in advance of a Wednesday deadline for Chinese company ByteDance to divest from TikTok or face a ban on the video-sharing app in the US.

Trump has on three occasions delayed the enforcement of the ban, which was included in legislation passed by the US Congress last year with overwhelming bipartisan support.

US and Chinese officials last met in July in Stockholm, Sweden, following talks in London and Geneva, Switzerland, in May and June, respectively.

At their most recent meeting, the sides agreed to extend an earlier pause on tariffs of up to 145 percent for another 90 days.

Under the truce, the US has been charging a 30 percent duty on Chinese goods, while US goods are subject to a 10 percent levy.

Heiwai Tang, director of the Asia Global Institute in Hong Kong, said neither Washington nor Beijing currently have much incentive to fully back down from the trade war.

“China has rare earth and the manufacturing capacity that the US needs, while the US has the market that China can’t easily replace with another one. So both have some bargaining power against each other,” Tang told Al Jazeera.

Tang said he expects Trump to lower tariffs at some point as rising prices became more of an issue in the US.

“The question is when,” he said.

“Economists are not good at predicting the exact timing of events. If you ask me, it will be very likely that both sides will lower tariffs on each other in less than a year’s time.”

Deborah Elms, head of trade policy at the Hinrich Foundation in Singapore, said she has modest expectations for the talks.

“If they can bundle something together, I would think they will try to promise to resolve TikTok by the end of Trump’s term. Extending the deadline for less than that just leads to new deadlines which are also likely to be problematic,” Elms told Al Jazeera.

A key agenda item of the talks, Elms said, is likely to be a long-mooted summit between Trump and Chinese President Xi Jinping, possibly on the sidelines of October’s APEC summit in South Korea.

“I think there is a strong interest in getting Trump and Xi together in a matter of weeks,” she said.

“That is likely to be high on the agenda for both sides.”