BGA China Adviser Eric Wang and Account Manager Sam Overholt wrote an update to clients on recent trade talks between China and the United States.

Context

  • The ongoing and consequential process of stabilizing U.S.-China relations since President Donald Trump took office in early 2025 is best read as provisional. Trump has announced a leader-level meeting with President Xi Jinping at Asia-Pacific Economic Cooperation (APEC) in Korea from October 31 to November 1. But Beijing has not issued a confirmation, so the meeting remains tentative. Media reports indicate progress on a TikTok divestiture framework, but the timing and terms remain unclear. The first bipartisan congressional delegation to Beijing since 2019 pressed for sustained, structured channels on difficult issues, notably fentanyl enforcement and military-to-military communications. Last week’s trade talks in Madrid, Spain, produced no public detail on a long-term architecture to protect the current tariff truce.
  • Negotiators on both sides are working against a tight deadline to turn tentative agreements into deliverables that can be announced at or before the APEC summit. For the United States, this effort comes at a moment of domestic constraint, with contentious congressional budget negotiations absorbing much of the political bandwidth in Washington. As a result, officials are prioritizing limited but verifiable outcomes: a finalized TikTok deal, signals on Chinese agricultural purchases from the United States, clearer guardrails on export control processes and potential adjustments tied to fentanyl-related enforcement. More sweeping issues, such as industrial policy and advanced computing restrictions, remain off the table for now but are expected to resurface once summit diplomacy concludes.

Significance

  • Although a framework for TikTok’s divestiture and continued U.S. operations was announced in principle after the Madrid trade talks, the final deal promised following the Trump-Xi call has not yet been completed. The divestiture plan stems from bipartisan congressional legislation passed in 2024, but implementation has been delayed by the Trump administration folding the issue into ongoing trade negotiations. The emerging framework reduces ByteDance’s stake and tightens U.S. control over data and governance, with congressional scrutiny focused on algorithmic control, source-code access and compliance oversight. Both sides have stayed intentionally vague. Beijing stresses respect for corporate choices within market rules and Chinese law; Washington underscores greater American control over data and governance without releasing binding terms. Even if a TikTok deal lands, it will not settle wider disputes over tariffs and export controls, and the Madrid talks produced no announced breakthroughs on a durable trade framework.
  • The bipartisan House of Representatives delegation to China, the first since 2019, reflects Washington’s renewed willingness to engage at a political level. Led by Democratic Rep. Adam Smith of Washington, the trip underscored the need for sustained dialogue even as differences remain deep. Early readouts suggest alignment with the defense-channel message on the importance of military-to-military communication and practical cooperation on enforcement priorities.
  • The trade negotiations are also increasingly defined by tit-for-tat leverage over export controls, with semiconductors and rare earths at the center. Washington is tightening chip-related restrictions, moving key facilities onto case-by-case licensing and adding Chinese firms to control lists. Beijing is countering with stricter export permits and licensing around rare earths and with targeted regulatory scrutiny of pivotal chip suppliers. The result is a regulatory arms race that injects uncertainty into supply chains as each side tests the other’s tolerance for economic pressure.

Implications

  • Average U.S. tariffs on Chinese goods stand at 57.6 percent with 100 percent coverage, while China’s average tariff on U.S. goods is 32.6 percent, also with 100 percent coverage. The two sides have not jointly announced a framework or timetable for reductions. A durable truce would set a multi-year ceiling on rates, restore a predictable exclusions process with deadlines and include an automatic snapback tied to verifiable commitments — especially time-bound Chinese purchases of U.S. agricultural commodities. Until such a framework is agreed, firms must plan around elevated costs and renewed escalation risk.
  • Taken together, the past two weeks reveal a dynamic of managed competition driven by legal and regulatory tools. Each side is wielding export licenses, control lists, antitrust and data-protection actions and targeted enforcement as levers while holding channels open to avoid escalation. Symbolic steps, such as the congressional visit and the defense chiefs’ call, sit alongside narrowly framed deals like the prospective TikTok framework. Neither Washington nor Beijing appears ready for major concessions, but both see value in stabilizing ties long enough to claim limited wins ahead of a crowded diplomatic calendar.

We will continue to keep you updated on developments in China as they occur. If you have any comments or questions, please contact BGA Adviser Eric Wang at ewang@bowergroupasia.com or Account Manager Sam Overholt at soverholt@bowergroupasia.com.

Best regards,

BGA China Team

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Advisor

Eric has over two decades’ experience in government affairs and public relations and currently serves as firm partner and managing director of Yuan Associates. He has worked with more than 80 clients in manufacturing, agriculture and food, consumer goods and service industries. Eric joined Yuan Associates in 2005 and become a partner and managing director in 2011. As managing director, he is responsible for comprehensive government affairs service for and management of clients. As a partner his responsibilities include overseeing the firm’s daily overall operations. Prior to joining Yuan Associates, Eric worked as an account manager for Euan Barty Associates ... Read More