U.S. and China Clash in Madrid: Trade Wars, TikTok Divestment, and Russian Oil Tariffs Take Center Stage

Geopolitical tensions escalate as economic superpowers face off in high-stakes negotiations.

Trade War Frontlines

Officials from both nations lock horns over longstanding tariff disputes—each side digging heels into Madrid's negotiation tables. The specter of Russian oil sanctions looms large, complicating already fragile diplomatic channels.

TikTok's Billion-Dollar Gambit

Forced divestment demands hit critical mass as U.S. regulators push for complete Chinese ownership separation. Beijing counters with data sovereignty arguments—classic power play masking deeper tech cold war maneuvers.

Energy Economics Unleashed

Oil tariffs become the negotiation's wildcard, with both nations calculating petrodollar impacts while pretending to care about Ukrainian sovereignty. Because nothing says 'diplomacy' like weaponized energy contracts.

Wall Street watches with performative concern—same hedge funds already shorting both currencies while long on conflict commodities. Some things never change.

TikTok deadline extension likely again

ByteDance, the Chinese owner of TikTok, has until September 17 to sell its U.S. operations or face a ban. The U.S. government had already given three extensions. It looks like they’ll hand out a fourth one. A senior official close to the WHITE House said, “a deal is not expected, but the deadline will be extended.”

TikTok wasn’t even part of earlier trade discussions in Geneva, London, or Stockholm, but now it’s officially listed on the Treasury’s meeting agenda.

The decision to include TikTok gives the Trump administration a reason to delay enforcement while showing action. This political balancing act isn’t going over well in Congress, where both parties had voted to force a sale for national security reasons.

Trump, who just opened his own TikTok account last month, has not commented directly on the timing. Wendy Cutler, former deputy U.S. Trade Representative and current head of the Asia Society Policy Institute, said the administration may be saving any real decisions on TikTok for a bigger moment.

“I expect major deliverables to be held until a possible Trump-Xi meeting later this year, maybe during APEC in Seoul,” she said. Cutler also pointed out that if any agreement happens, it might also involve easing soybean restrictions, dropping fentanyl-related tariffs, and addressing U.S. export controls.

But Cutler warned that the deeper U.S. demands on China, like forcing Beijing to change its economy to rely more on domestic spending instead of subsidized exports, could drag on for years. “Unless there’s some breakthrough on its demands to China, I don’t see the U.S. giving up any leverage,” she added.

Washington presses G7 to target China’s Russian oil deals

Scott used the Madrid talks to pressure America’s G7 allies to slap tariffs on Chinese and Indian goods over their continued oil imports from Russia. He had already urged the group on Friday to act fast.

In a joint statement with Greer, Scott said, “Only with a unified effort that cuts off the revenues funding Putin’s war machine at the source will we be able to apply sufficient economic pressure to end the senseless killing.”

The U.S. already slapped an extra 25% tariff on Indian goods, but hasn’t done the same to China, yet. The G7 finance ministers, also meeting this week, discussed this demand and agreed to speed up discussions about using frozen Russian assets to fund Ukraine’s defense.

The Madrid meeting also included talks about illicit tech shipments. The U.S. wants China to stop selling certain goods to Russia that are allegedly helping the war effort in Ukraine. The Treasury has labeled this a key issue, referring to it as “combating money laundering,” though the Core focus is enforcement and tech surveillance.

China’s Ministry of Commerce confirmed that it WOULD respond to U.S. complaints and bring up its own: the ongoing tariffs, the expanding export bans, and the growing list of tech restrictions. Beijing is also expected to push back on Washington’s aggressive use of economic tools to restrict competitors.

None of these positions has changed in recent meetings. José Manuel Albares, Spain’s Foreign Minister, welcomed the delegations personally before the session. A senior Spanish government official said Madrid sees the meeting as proof that Spain is now viewed as a serious location for high-level diplomacy.

“Spain is pushing to host a major peace summit on the Israel-Palestine war,” the official said. Spain is also using the event to fix its own tension with the Trump administration. Madrid has refused to meet NATO’s defense spending target and has been openly critical of Israel’s actions in Gaza.

The country also annoyed Scott back in April by calling Beijing a strategic partner, right as Trump was tightening his tariff campaign. Scott responded at the time, saying, “That’s like cutting your own throat.”

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