US and Chinese officials have reached a preliminary trade framework, averting a looming 157% tariff on Chinese goods and setting the stage for a potential breakthrough meeting between President Donald Trump and Chinese leader Xi Jinping later this week.
The development comes during the first leg of Trump’s diplomatic tour across Asia and has injected optimism into global markets. Both Asian indices and US stock futures responded positively to signs of easing tensions between the two largest economies after weeks of retaliatory trade measures.
Breakthrough in Malaysia Talks
The most recent round of trade discussions took place in Kuala Lumpur, Malaysia, marking the fifth in-person meeting between the two sides. Treasury Secretary Scott Bessent, who led the US delegation alongside Trade Representative Jamieson Greer, described the outcome as “a substantial framework” for Trump and Xi to build upon when they meet later this week.
Bessent confirmed in a series of interviews that Trump’s threatened 100% tariffs on Chinese imports were now “off the table,” suggesting a cooling of hostilities that had threatened to escalate into a full-blown trade war.
The anticipated Trump-Xi meeting, expected to take place Thursday on the sidelines of the Asia-Pacific Economic Cooperation (APEC) CEO summit in South Korea, could mark the most significant dialogue between the two leaders since Trump began his second term. Although Beijing has not officially confirmed the sit-down, such discretion is consistent with its diplomatic practice of withholding announcements until talks are underway.
Focus Areas: Rare Earths, Soybeans, and TikTok
According to early reports, the framework includes several key areas of cooperation. First, the US is expected to receive a “deferral” on China’s export controls involving rare earth minerals — critical materials in high-tech manufacturing where China dominates global processing. This move follows a sharp rise in tensions after Beijing expanded restrictions in September, prompting Washington to threaten sweeping new tariffs.
Bessent also revealed that China agreed to make “substantial purchases” of American soybeans, offering relief to US farmers who have struggled amid dwindling exports to their once-largest buyer. This gesture could help stabilize agricultural trade and political relations between the two nations.
Another highlight of the framework involves new measures to combat the flow of fentanyl precursor chemicals into the United States, with both sides agreeing to strengthen enforcement cooperation.
In addition, Bessent announced that Washington and Beijing finalized a long-awaited deal regarding TikTok’s US assets, which are required by law to be sold to American buyers. He confirmed that “all the details are ironed out,” leaving only the formal approval from both leaders.
A Shift in Tone
Chinese state media echoed cautious optimism, confirming that negotiators had reached a “preliminary consensus” on key concerns, including port fees, fentanyl tariffs, and the extension of the current trade truce.
Li Chenggang, China’s chief trade negotiator, emphasized that while China remains firm in protecting its national interests, it seeks stability rather than confrontation. “The shocks and fluctuations of the past month were not what China wanted to see,” Li said, calling the new framework “a constructive step forward.”
Both nations have agreed to finalize the details in the coming days through their respective domestic approval processes. As Trump and Xi prepare to meet, the world’s attention turns to whether this framework can evolve into a lasting trade accord — one that may finally ease years of economic friction between Washington and Beijing.
