Kuala Lumpur: US Treasury Secretary Scott Bessent announced on Sunday that a tentative trade framework has been reached between the United States and China, potentially averting a substantial increase in tariffs on Chinese exports. The framework includes China's commitment to delay export restrictions on rare earths and substantially increase its purchase of US soybeans. This development follows two days of intensive trade talks between officials from both nations in Malaysia.
According to United Nations, Bessent expressed optimism about the agreement, suggesting that it would lead to significant soybean purchases by China over the coming years and delay in the expanded licensing regime for rare earths by a year. He stressed the importance of this deal during appearances on several American television programs, indicating that US soybean farmers would benefit significantly from the potential trade agreement.
In his discussions on various American news programs, Bessent emphasized the anticipated avoidance of a new round of 100 percent tariffs on Chinese goods, which had been threatened by President Donald Trump. He highlighted that major topics of discussion between President Trump and President Xi Jinping would include balanced trade, agricultural purchases, and efforts to address the US fentanyl crisis, which had previously justified a 20 percent tariff on Chinese goods.
Chinese Vice Premier Li Keqiang acknowledged the progress, stating that both sides had reached a "preliminary consensus" and would proceed with their respective internal approval processes. Li noted the intensity and constructiveness of the consultations, reflecting on the tough stance taken by the US during negotiations.
President Trump, who arrived in Malaysia for the ASEAN Summit, expressed optimism about a potential deal with China, hinting at subsequent meetings with President Xi in both China and the United States. The discussions aim to prevent an escalation of the trade war, especially in light of Trump's prior threats of increased tariffs starting November 1, in response to China's tightened export controls on rare earths.
The trade talks have also touched upon various other issues, including fentanyl, trade expansion, and potential extensions of the trade truce, which is set to expire on November 10. Both sides are considering extending the truce, marking a second extension since its inception in May.
While President Trump has officially announced talks with President Xi, Beijing has yet to confirm the meeting. Among the critical issues on the table are China's purchases of US soybeans, Taiwan, and the release of Hong Kong media tycoon Jimmy Lai, whose detention has drawn international attention.
The fragile trade truce between the US and China has been strained recently, as both nations have engaged in retaliatory measures, export curbs, and threats of further sanctions. The recent talks have focused on China's expanded controls over rare earth exports, leading to global shortages and prompting the US to consider restrictions on software-powered exports to China.