The US and China are set to hold a second day trade talks in Spain in an effort to lift tensions between the two biggest economies in the world.
US and Chinese officials will meet on Monday at Santa Cruz Palace in Madrid and reach a comprehensive trade agreement after months of trade cooperation in their latest bids.
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Officials led by US Treasury Secretary Scott Bescent and Chinese Deputy Prime Minister held a roughly six-hour consultation on Sunday.
The talks scheduled to take place through Wednesday are as Washington-Beijing relations continue to be caught up in by differences in trade, including China’s purchase of Russian oil.
President Donald Trump’s administration has pushed US allies to impose sharp tariffs on China and India rather than Russian oil purchases, in order to end the war in Ukraine on Russian oil purchases.
In a social media post over the weekend, Trump countries said NATO countries should impose up to 100% tariffs on Chinese goods until the war is over.
“China has strong control over Russia, and even a grip, and these strong tariffs will break that grip,” Trump said on his true social platform.
Trump has already raised the tariff rate on Indian goods to 50% to drive New Delhi out of Moscow, but he has not previously targeted China for oil purchases.
China’s Foreign Minister Wang Yi on Saturday appeared to have clashed with Washington’s efforts to punish the country that buys Russian oil. He said sanctions would only “complicate” the situation in Ukraine.
Wang’s comments added 23 more Chinese companies to the restricted trade list as China’s Commerce Department launched two new investigations into the US chip division.
The talk in Spain precedes the Wednesday deadline due to Chinese company consolidation, selling from Tiktok and facing a ban on US video sharing apps.
Trump has delayed enforcement of the ban on three occasions, included in a law passed last year with overwhelmingly bipartisan support.
US and Chinese officials last met in Stockholm, Sweden in July, following consultations in London and Geneva in May and June, respectively.
At their recent meeting, the side agreed to extend the early hiatus on tariffs of up to 145% over an additional 90 days.
Under the armistice, the US has charged 30% of its obligations on Chinese goods, while the US is subject to 10% collection.
Haywai Tan, director of the Institute for Global Studies in Hong Kong, said neither Washington nor Beijing have the incentive to completely retreat from the trade war.
“China has rare earths and the manufacturing capabilities needed by the US, but the US has a market that China cannot easily replace with another.
Tan said he hopes Trump will reduce tariffs at some point, as prices have become more of a problem in the US.
“When is the problem?” he said.
“Economists aren’t good at predicting the exact timing of events. If you ask me, it’s very likely that both sides will lower each other’s tariffs within a year.”
Deborah Elms, director of trade policy at Singapore’s Hinrich Foundation, said she has modest hopes for the consultation.
“If they can bundle something together, they’ll try to promise to settle Tiktok by the end of Trump’s term. Extending a smaller deadline will only lead to a new deadline where there are likely issues,” Elms told Al Jazeera.
Elms said the important agenda item for the talks is likely to be a long-awaited summit between Trump, who is the bystander of the October APEC summit in South Korea, and Chinese President Xi Jinping.
“I think there’s a strong interest in bringing Trump and Xi together in a few weeks,” she said.
“That’s likely to be high on both sides’ agenda.”
