The United States and China are holding a second day of trade talks in Madrid as the Trump administration threatens sweeping new tariffs tied to Beijing’s purchases of Russian oil and a US deadline looms for ByteDance to divest TikTok or face a ban. The meetings, led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, come amid a fragile tariff pause and sharpened rhetoric on technology and energy ties.

Tariff Truce And Fresh Threats

Officials met for about six hours on Sunday and are scheduled to continue through Wednesday, extending efforts to stabilise relations after months of tit-for-tat moves. Under the latest 90-day truce, the US charges a 30 percent duty on Chinese goods while China levies 10 percent on US products. President Donald Trump said NATO countries should impose tariffs of up to 100 percent on Chinese goods “until the war is brought to an end,” arguing “these powerful Tariffs will break that grip.”

Russian Oil Purchases In Focus

Washington has pressed allies to penalise China and India for buying Russian oil to squeeze Moscow over its war in Ukraine. In response, Chinese Foreign Minister Wang Yi said sanctions on buyers would only “complicate” the conflict, signalling Beijing’s opposition to broader restrictions linked to energy trade.

TikTok Deadline Looms

The talks precede a Wednesday deadline for ByteDance to sell TikTok or see it banned in the US, following legislation passed with broad bipartisan support. Trump has delayed enforcement three times, but officials and analysts say a durable resolution could be tied to broader trade understandings. “If they can bundle something together, I would think they will try to promise to resolve TikTok by the end of Trump’s term,” said Deborah Elms of the Hinrich Foundation.

Business Sentiment And Leverage

Despite the pause, neither side shows strong incentive to fully back down. “China has rare earth and the manufacturing capacity that the US needs, while the US has the market that China can’t easily replace,” said Heiwai Tang of the Asia Global Institute, adding he expects tariffs to be lowered within a year as price pressures mount in the US.

Possible Leaders’ Summit

A key agenda item is a long-mooted meeting between Trump and Xi Jinping, potentially 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,” Elms said, while cautioning expectations for the Madrid round remain modest.