China and the United States have resumed trade talks in Madrid, Spain, in an effort to narrow their differences on trade and technology issues that have strained relations between the two largest economies.

The talks, which started at Spain’s foreign ministry, are expected to continue through Wednesday. US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are leading the discussions.

The agenda includes contentious issues such as President Donald Trump’s threat of steep tariffs on Chinese imports and Washington’s demand that TikTok be sold to a non-Chinese owner or face a US ban by September 17.

Trade tensions between the two nations escalated earlier this year, with tit-for-tat tariffs reaching triple digits and disrupting supply chains. Although both governments agreed to roll back duties to 30% on US goods and 10% on Chinese exports, the temporary truce expires in November.

Beijing has urged Washington to resolve disputes “based on mutual respect and equal consultations.” Despite the ongoing talks, China launched investigations into the US semiconductor sector over the weekend, signaling that frictions remain high. The meetings could lay the groundwork for a possible summit between Trump and Chinese leader Xi Jinping later this year.

Negotiators face the challenge of stabilizing an uneasy truce while addressing disputes over technology access, tariffs, and rare earth exports. The outcome of these talks will be crucial in determining the future of US-China trade relations.