The US and China have made progress toward reaching a trade deal, easing tensions between the world’s two largest economies.
Both sides have reached a “framework agreement” that will be discussed during a meeting between the US President, Donald Trump, and the Chinese leader, Xi Jinping, later this week.
Framework Agreement
On Sunday, trade negotiators from the US and China announced a framework agreement following the fifth round of talks in Malaysia, the first stop in Trump’s five-day Asia tour, reported CNN.
The US delegation was led by Treasury Secretary, Scott Bessent, and Trade Representative Jamieson Greer. On the other hand, China’s top trade negotiator, Li Chenggang, and Vice Premier, He Lifeng, led the Chinese delegation.
In remarks to various media outlets, the US Treasury Secretary, Scott Bessent, announced progress. “I think we’ve reached a substantial framework for the two leaders who will meet next Thursday,” Bessent said, adding that the 100% tariffs on Chinese goods that Trump previously threatened were “effectively off the table.”
Rare Earths & TikTok Settled
Although the full details of the agreement are not clear yet, Bessent said that the discussions covered tariffs, rare earths, fentanyl and “a substantial purchase of US agricultural products,” namely soybeans, of which China is the world’s biggest buyer.
Speaking to NBC News, the Treasury Secretary said he expects the US would get “some kind of deferral” on rare earth export controls.
China accounts for around 70% of the world’s rare earth minerals mining output, and controls about 90% of global rare earths processing. Rare earth minerals are essential for high-tech industries, including automobiles, defense and semiconductors.
Moreover, Bessent told CBS that they reached an initial agreement to enhance cooperation on countering fentanyl, which aims to cut the flow of the precursor chemicals of the illegal drug into the US.
More importantly, Bessent said that both sides reached a “final deal on TikTok,” which needs to sell its US operations to American buyers or face shut down. “As of today, all the details are ironed out, and that will be for the two leaders to consummate that transaction,” Bessent noted.
Chinese Confirmation
The Chinese state-run media Xinhua confirmed on Sunday the framework agreement, reporting that trade negotiators from both countries reached a “preliminary consensus” on how to tackle their “respective concerns.”
In this context, Li said that Beijing and Washington held deep conversations to address issues including US special port charges on China-built ships, further extension of trade truce, fentanyl tariffs, in addition to cooperation on combating illegal drugs, as well as export controls.
After the talks, he told reporters that “the shocks and fluctuations” between the two countries over the past month were “not what China wanted to see,” emphasizing China’s firm position in defending its interests.
“Both sides agreed to further finalize the specific details and fulfil their respective domestic approval processes,” he added.
Trump-Xi Summit
Trump and Xi are due to meet in South Korea on Thursday, on the sidelines of the Asia-Pacific Economic Cooperation (APEC) Summit. It will be the first meeting for the two leaders since Trump returned to the White House in January 2025.
In the light of this, Trump expressed excitement about meeting Xi, voicing optimism regarding reaching a trade deal with China. “I’ve got a lot of respect for President Xi and I think we’re going to come away with a deal,” he told reporters aboard Air Force One on his way to Tokyo, according to Reuters.
Earlier this month, Trump said he would impose a new 100% tariff on Chinese imports to the US, on top of the 30% tariffs already in effect, and export controls on all critical software, starting on November 1, 2025, in response to Beijing’s expanded controls over rare earths.
In response, China threatened it would take corresponding measures if the US did not backtrack on its decision.
