China and the United States are once again at the center of a high-stakes standoff, this time over the global semiconductor industry, as Beijing launched two major investigations into American chip trade policies just one day before pivotal trade talks in Madrid. The Chinese Ministry of Commerce announced on September 13, 2025, that it would probe both alleged discrimination against Chinese firms in the semiconductor sector and suspected dumping of certain US analog chips into the Chinese market. These moves, reported by Reuters and confirmed by several international outlets, mark a significant escalation in the ongoing technology and trade rivalry between the world’s two largest economies.
The timing of these investigations is no accident. They were unveiled on the eve of a new round of US-China trade discussions set for September 14–17 in Madrid, led by Chinese Vice Premier He Lifeng and US Treasury Secretary Scott Bessent. According to statements cited by Reuters and The Express Tribune, the agenda for these talks is packed: tariffs, US export controls, and the future of TikTok, the Chinese-owned social media giant now facing a looming ban in the United States unless it divests its US assets by September 17.
The first of China’s investigations will examine whether US policies unfairly target Chinese companies in the chip sector—a charge Beijing has leveled repeatedly in recent months. The second focuses on suspected dumping of US analog chips, particularly those used in everyday products like hearing aids, Wi-Fi routers, and temperature sensors. The Ministry of Commerce specifically identified commodity interface IC chips and gate driver IC chips, products commonly made by US firms such as Texas Instruments and ON Semiconductor, as targets of the anti-dumping probe, as reported by Reuters and Asia Financial.
In a sharply worded statement, the Chinese ministry said the United States had imposed "a series of restrictions" on China in recent years, including export controls and discrimination probes. These measures, the ministry argued, “are intended to curb and suppress China’s development of high-tech industries such as advanced computing chips and artificial intelligence.” The ministry went further, questioning Washington’s motives: “What is the US’s intention in imposing sanctions on Chinese companies at this time?” it asked, before warning, “China urges the US to immediately correct its erroneous practices and cease its unwarranted suppression of Chinese companies. China will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies.”
The latest flashpoint arrived just a day after Washington added 32 entities—23 of them Chinese—to its restricted trade list. Among those were two companies accused of trying to obtain US chipmaking equipment for SMIC, China’s leading semiconductor manufacturer. The US Commerce Department said these additions were made on national security grounds, a rationale that has become familiar as both the Trump and Biden administrations have sought to limit China’s access to advanced chip technology.
The Madrid meeting marks the fourth major in-person dialogue between the two countries this year, following previous rounds in Geneva, London, and Stockholm. According to Asia Financial, the talks are part of a broader effort to maintain a fragile trade truce that has seen retaliatory tariffs eased and the flow of rare earth minerals from China to the US restored. In July, both sides agreed in Stockholm to extend a pause on tariffs for another 90 days—a move approved by President Donald Trump in August, pushing the next tariff deadline to November 10, 2025.
US Treasury Secretary Scott Bessent, who will meet Vice Premier He Lifeng in Madrid, described the previous round of talks in Stockholm as “very fulsome.” Bessent told reporters, “We just need to de-risk with certain, strategic industries, whether it’s the rare earths, semiconductors, medicines, and we talked about what we could do together to get into balance within the relationship.”
Yet, beneath the diplomatic pleasantries, the rift over semiconductors and technology policy continues to widen. The US maintains that its restrictions on chip sales and manufacturing equipment are necessary for national security, especially as tensions rise over issues like Taiwan and cybersecurity. China, for its part, sees these restrictions as a deliberate attempt to stymie its technological ascent. As Asia Financial summarized, Beijing views the US curbs as “the containment and suppression of China’s development of high-tech industries.”
The future of TikTok, owned by China’s ByteDance, is another thorny issue on the Madrid agenda. The app faces a September 17 deadline to divest its US operations or risk being banned outright. US lawmakers have repeatedly voiced concerns that TikTok’s American user data could be accessed by the Chinese government, posing a national security threat. China’s official People’s Daily pushed back forcefully on September 13, stating, “The Chinese government attaches great importance to data privacy and security and has never and will never require companies or individuals to collect or provide data located in foreign countries for the Chinese government in violation of local laws.” The newspaper added, “If the United States insists on undermining the legitimate interests of Chinese companies, China will take necessary measures to safeguard national interests and the rights of Chinese companies.”
With the deadline looming, the fate of TikTok remains uncertain. President Trump has granted an extension until September 17 for the company to divest its US assets, but the standoff has become emblematic of the broader mistrust between Washington and Beijing. While the US frames its actions as necessary to protect citizens’ data and national security, China insists that its companies are being unfairly targeted and vows to respond in kind if American pressure continues.
All of this comes against a backdrop of repeated efforts to stabilize US-China economic relations. Since May 2025, the two sides have met in Geneva, London, Stockholm, and now Madrid, each time agreeing to temporary pauses on escalating tariffs and seeking ways to prevent a full-blown trade war. According to Reuters, these truces have allowed for the continued flow of critical materials and goods, even as both countries pursue increasingly protectionist policies in strategic sectors like semiconductors.
Ultimately, the outcome of this week’s Madrid talks may set the tone for US-China relations in the months ahead. With both sides digging in over technology, trade, and data privacy, the road to genuine compromise remains rocky. But as the world’s two largest economies try to balance competition with cooperation, every diplomatic overture—and every retaliatory measure—carries global consequences.
The coming days in Madrid will be watched closely not only by policymakers in Washington and Beijing, but by businesses, consumers, and governments around the world. In an era where microchips power everything from smartphones to satellites, the outcome of this dispute could ripple far beyond the negotiating table.
