The S&P 500 (SPX) is trading slightly in the red despite trade deal progress between the U.S. and China. Officials from both sides, led by U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, have been engaged in discussions for several days in Madrid, Spain.
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“We’ll be seeing each other again,” Bessent said in an interview with CNBC on Tuesday. “Each one of those talks has become more and more productive. I think the Chinese now sense that a trade deal is possible.”
Tariffs Narrow U.S. Deficit as TikTok Ban Pressures China
The U.S. had a $295 billion goods trading deficit with China last year, which was a major factor in President Trump’s tariffs on Chinese imports. These tariffs have helped reduce the deficit, which totaled $128 billion as of July.
Bessent added that Trump’s willingness to ban TikTok in the U.S. pushed China to strike a framework deal for the app. President Trump had previously extended the deadline for China to divest its U.S. version of TikTok to September 17, warning of a shutdown if it failed to do so.
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