US and Chinese officials have tentatively agreed on a new trade deal framework, potentially easing tensions and averting looming tariffs. The agreement, reached during negotiations at the ASEAN Summit in Kuala Lumpur, is expected to halt President Donald Trump’s proposed 100% tariffs on Chinese imports scheduled for November 1. Additionally, China plans to delay the implementation of its rare earths export licensing system for a year pending a review.
While US Treasury Secretary Scott Bessent confirmed these developments, Chinese officials only acknowledged a “preliminary consensus,” indicating that domestic approval is necessary for the deal to proceed. The finalization of the framework is anticipated during the upcoming meeting between Trump and Chinese President Xi Jinping at the APEC Summit in Gyeongju, South Korea, although Beijing has not yet confirmed this summit.
The agreement is likely to extend the current tariff truce beyond its expiration on November 10, leading China to resume significant purchases of US soybeans, which had ceased in September. US Trade Representative Jamieson Greer highlighted the progress as a step towards gaining greater access to Chinese rare earths and achieving a more balanced trade relationship. Discussions also encompassed TikTok’s transition to US ownership, cooperation on the US fentanyl crisis, and trade matters such as port fees.
Chinese negotiator Li Chenggang characterized the talks as “intense but constructive,” underscoring Beijing’s firm defense of its interests while seeking practical resolutions. Trump expressed optimism during his Asia tour, anticipating a deal with China and hinting at potential future meetings with Xi in China and the US, potentially at Mar-a-Lago.
The expected agreement aims to de-escalate tensions that led to steep tariffs imposed by both countries earlier in the year. Concerns over China’s restrictions on rare earth minerals, vital for industries like electric vehicles and semiconductors, had raised fears of severe supply disruptions.
Trump and Xi are anticipated to address various topics during their discussions, including Taiwan, the detention of Hong Kong media tycoon Jimmy Lai, and China’s potential involvement in influencing Russia’s actions in Ukraine. Despite recent progress, both nations remain cautious following months of sanctions, export restrictions, and retaliatory actions. The tentative deal signifies a delicate yet optimistic stride towards restoring stability in US-China trade relations.