UPDATE 5-US says it will press ahead with TikTok ban if China doesn't drop tariff, tech demands

The U.S. will go ahead with a ban on short-video app TikTok if China doesn't drop demands for reduced tariffs and technological restrictions as part of a divestiture deal, a senior U.S. official with knowledge of negotiations said on Monday. U.S. and China delegations are discussing the divestment from TikTok by Chinese owner Bytedance as part of a round of broader talks on tariffs and economic policy taking place in Madrid. TikTok faces being shut down as early as September 17 in the U.S. unless it moves to U.S. ownership.

The Chinese delegation came to the Madrid talks with a fundamental misunderstanding of the U.S. position on TikTok, said the U.S. official, who asked not to be named. Speaking to reporters earlier, U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer said China wanted concessions on trade and technology in exchange for agreeing to divest from the popular social media app.

"Our Chinese counterparts have come with a very aggressive ask," Bessent said, adding: "We are not willing to sacrifice national security for a social media app." The U.S.-China negotiations at the Spanish foreign ministry's baroque Palacio de Santa Cruz, which began on Sunday, are the fourth round of talks in four months to address strained trade ties and a looming divestiture deadline for TikTok.

They take place as Washington demands that its allies place tariffs on imports from China over Chinese purchases of Russian oil, which Beijing on Monday said was an attempt at coercion. "This is a typical act of unilateral bullying and economic coercion, a serious violation of the consensus reached by the Chinese and U.S. heads of state in their phone call, and could severely impact global trade as well as the stability of industrial and supply chains," a Chinese Commerce Ministry spokesperson said in a press conference in Beijing.

PROGRESS ON TECHNICAL DETAILS Bessent said both sides in the talks had made good progress on technical details. Extending the TikTok divestment deadline would depend on how talks went on Monday, he said.

"From the Chinese perspective, they view as part and parcel of the potential TikTok deal a variety of matters, whether it's tariffs or other measures that have been taken over years," Greer said. Chinese Foreign ministry spokesperson Lin Jian said China had no new information to give.

"Regarding TikTok, China has repeatedly stated its position," Lin said at a press conference in Beijing on Monday. Adding further tension, China's market regulator said on Monday that a preliminary investigation of Nvidia had found the U.S. chip giant had violated its anti-monopoly law.

The probe is widely seen as a retaliatory shot against Washington's curbs on the Chinese chip sector. China is reluctant to divest from TikTok because it would open the door for more forced sales of Chinese companies in the West, said Alicia Garcia-Herrero, a Taiwan-based senior fellow at think tank Bruegel.

For Washington, banning TikTok could be difficult because of the young voters that use it, Garcia-Herrero said. "The U.S. is in a bit of a trap here because it's not easy to prohibit TikTok," she said.

TIT-FOR-TAT MEASURES Delegations led by Bessent and Chinese Vice Premier He Lifeng have met in European cities since May to try to resolve differences that prompted U.S. President Trump to raise tariffs on Chinese imports and sparked tit-for-tat measures, including similarly high import duties by China on U.S. goods and a halt in the flow of rare earths to the United States.

The Trump administration, however, faces a ruling from the U.S. Supreme Court that could strike down the U.S. tariffs on Chinese goods imposed this year, potentially weakening Trump's leverage over Beijing. A ruling is expected by early 2026. The delegations last met in Stockholm in July, where they agreed to extend for 90 days a trade truce that sharply reduced triple-digit retaliatory tariffs on both sides and restarted the rare-earth exports from China to the United States.

Trump has repeatedly expressed interest in a meeting with Chinese President Xi Jinping, but William Reinsch, a senior trade adviser at Washington think tank the Center for Strategic and International Studies, said the Chinese would not agree to such a meeting until they knew the outcome and were pushing for further easing of U.S. export controls on chips and other high-tech goods. "Setting that up is really what these talks are all about," Reinsch said.

Even if a deal over Chinese divestment from TikTok was not reached it would not affect relations, Bessent added. "It's still very good at the highest levels," he said. "Ambassador Greer and myself have great respect for all counterparts."

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)