- TikTok as bargaining chip: U.S. insists ByteDance must divest TikTok or face a ban, rejecting China’s push to link the issue with tariff concessions.
- China resists precedent: Beijing is reluctant to divest TikTok, fearing it could trigger further forced sales of Chinese firms in Western markets.
- Negotiations in Madrid: The fourth round of talks in four months focused heavily on TikTok, tariffs, and broader economic policy.
- Tensions escalate: China announced an anti-monopoly probe into Nvidia and condemned U.S. tariff pressure, framing it as coercive.
- Political stakes: Analysts note banning TikTok risks backlash among U.S. youth voters, complicating Washington’s negotiating leverage.
- Deadline looms: Without an agreement, TikTok could be shut down in the U.S. after September 17, though a short extension remains possible.
Madrid meetings test whether a divestment deal can prevent a US shutdown of the app.
High-level delegations from the United States and China gathered in Madrid this week for a fourth round of negotiations aimed at easing trade tensions. While tariffs, export controls, and broader economic cooperation remain part of the agenda, the spotlight has shifted firmly onto TikTok.
With a looming September 17 deadline for ByteDance to divest its U.S. operations or face a nationwide ban, the app has become both a bargaining chip and a symbol of larger disputes over technology and national security.
TikTok as the Core Dispute
According to U.S. officials, progress on trade issues is now tied directly to TikTok’s fate. Washington insists that the platform’s Chinese ownership poses unacceptable national security risks and must be transferred to U.S. control.
“We are not willing to sacrifice national security for a social media app,” U.S. Treasury Secretary Scott Bessent said during the talks. His comments underline Washington’s position that TikTok is not just another commercial concern but part of the wider battle over digital sovereignty.
Chinese negotiators, led by Vice Premier He Lifeng, reportedly came to Madrid seeking concessions on tariffs and technology restrictions in exchange for agreeing to divest from TikTok. That linkage was immediately rejected by the U.S. side, which sees such demands as an attempt to trade away leverage.
“Our Chinese counterparts have come with a very aggressive ask,” said U.S. Trade Representative Jamieson Greer, signaling how contentious the negotiations have become.
China’s Reluctance and Retaliatory Moves
For Beijing, TikTok divestment represents more than the fate of a single platform. Analysts point out that acquiescing to U.S. demands could set a precedent for future forced sales of Chinese companies abroad. In an apparent show of defiance, China’s market regulator launched a preliminary anti-monopoly investigation into U.S. chipmaker Nvidia, widely interpreted as a retaliatory measure.
Chinese officials further described U.S. demands on tariffs and TikTok as “a typical act of unilateral bullying and economic coercion,” underscoring their unwillingness to decouple TikTok’s divestment from broader economic issues.
Technical Progress but Political Roadblocks
Despite tensions, negotiators described “good progress on technical details.” These details remain undisclosed, but officials hinted at mechanisms that could govern data handling, app algorithms, and compliance checks if TikTok were to be transferred to U.S. ownership.
Whether such technical discussions can overcome the political impasse is less clear. Extending the divestment deadline is an option, but U.S. officials have suggested that will depend on Beijing’s willingness to separate TikTok’s future from tariff demands.
Broader Geopolitical Stakes
The Madrid talks take place against a backdrop of escalating tit-for-tat measures. The Trump administration has imposed steep tariffs on Chinese goods, while Beijing retaliated with its own duties and restrictions, including halts on rare-earth exports. The U.S. is also urging allies in Europe to impose secondary tariffs on China due to its purchases of Russian oil—a move Beijing has condemned as coercive.
For Washington, the stakes are not just geopolitical but also domestic. Analysts note that banning TikTok could carry political risks given its popularity among younger voters.
“The U.S. is in a bit of a trap here because it’s not easy to prohibit TikTok,” said Alicia Garcia-Herrero, senior fellow at Bruegel. This political dimension may influence how far the U.S. is willing to push the ban, even as it frames the issue in terms of national security.
Outlook and Next Steps
With just days left before the TikTok deadline, the Madrid meetings will likely determine whether the app remains accessible to American users. If ByteDance refuses to divest under U.S. terms, TikTok could face a shutdown. If China insists on linking the issue to tariffs, a breakthrough may remain elusive.
A Supreme Court review of U.S. tariffs on Chinese goods, expected in early 2026, further complicates the landscape by potentially undermining Washington’s leverage.
What is clear is that TikTok has become more than a social platform. It is now a proxy for the broader struggle between the world’s two largest economies over technology, security, and global influence.
