Another Round of U.S.-China Trade Talks
U.S. Treasury Secretary Scott Bessent arrives ahead of trade talks with Chinese Vice Premier He Lifeng in Madrid on Sept. 14.Thomas Coex/AFP via Getty Images
The United States and China kicked off a new round of trade talks in Spain on Sunday.
Their first achievement was a “framework” deal on the fate of TikTok, which the United States banned last year unless Chinese owner ByteDance sells the app to a U.S. company. The deal is still far from certain, however. U.S. President Donald Trump has delayed implementation of the ban a few times, just this week extending the pause until Dec. 16, and will almost certainly do so again if needed.
Trump seems interested not in blocking TikTok but in turning it into a platform that is more friendly to his administration. The White House’s preferred buyer of TikTok would likely be Oracle, whose billionaire owner, Larry Ellison, is a close Trump ally. Ellison’s son, David, now the CEO of Paramount, is turning CBS News to the right and attempting to acquire CNN, too.
Should ByteDance sell TikTok, China would lose a considerable source of soft power in the United States, but Beijing may see it as advantageous to do Trump such a large favor. If reports that the app would still use ByteDance’s algorithm are accurate, then China would get the best of both worlds: effectively complying with the law while keeping control over the content that U.S. users consume.
But it’s uncertain how much of TikTok’s user base would choose to stay in the event of a sale. The app is roughly equally divided between right-leaning and left-leaning political content and has a diverse group of U.S. users. News of the initial ban elicited backlash and sparked a brief enthusiasm for Chinese apps such as RedNote. If the new ownership tries to reorient the app’s content to the right, it might face new problems.
Meanwhile, prospects for a bigger trade deal remain weak. Despite optimistic statements from both sides, tariffs are at record levels, and the United States continues to act aggressively. On Friday, Trump called for NATO allies to sanction China and blacklisted two Chinese firms that support chipmaking efforts, prompting Beijing to launch an anti-dumping investigation into the U.S. semiconductor sector.
One of the paradoxes at play with these talks is that both sides are negotiating from a position of economic weakness. The United States is seeing dwindling job numbers and rising inflation. Farmers are in crisis from the loss of Chinese markets, where agricultural exports such as soybeans were one of the few items on the U.S. side of the balance sheet.
At the same time, China’s economy has seriously slowed amid a real estate collapse. While the country’s exports to the rest of the world have compensated for big losses in the United States, prices are declining sharply for producers, and key manufacturing regions are struggling.
If I had to bet on who comes out ahead from the trade negotiations, I would slide my chips to China’s side of the table. The Chinese team is more experienced, more persistent, and less beholden to one man’s ego, and trade talks often come down to days of hacking out details. Mass federal firings have cost the Trump administration a lot of the expertise that it needs to handle these.
All of this assumes that eventually an agreement will be reached and that tariffs will be dialed back. If Beijing and Washington can’t strike a deal and punt talks forward another three months, then both wings of the global economy look shakier than ever.