U.S. and China Near Trade Truce to Ease Tariffs and Rare Earth Tensions

Top economic officials from the United States and China reached a preliminary framework for a new trade agreement that could ease escalating tensions between the two nations. The deal, expected to be finalized by U.S. President Donald Trump and Chinese President Xi Jinping later this week at the APEC Summit in Gyeongju, South Korea, aims to delay steeper American tariffs and suspend China’s rare earth export restrictions.

U.S. Treasury Secretary Scott Bessent announced that the talks in Kuala Lumpur successfully averted Trump’s proposed 100% tariffs on Chinese imports scheduled for November 1. He also revealed that China plans to postpone its rare earth minerals licensing regime by a year. The discussions, held alongside the ASEAN Summit, marked the fifth round of negotiations between Bessent, U.S. Trade Representative Jamieson Greer, and Chinese officials including Vice Premier He Lifeng and top negotiator Li Chenggang.

While U.S. officials expressed optimism, Chinese representatives maintained a cautious tone, confirming only a “preliminary consensus.” Both sides agreed to continue internal consultations before finalizing the agreement. The potential deal would extend the current tariff truce past its November 10 expiration and revive China’s purchases of U.S. soybeans, a crucial export market that had stalled amid trade frictions.

Greer noted that both nations will pause certain punitive measures and work toward balancing trade, particularly in rare earth materials vital for high-tech industries. Bessent also mentioned progress on the TikTok ownership issue, expected to be finalized during the Trump-Xi meeting.

The upcoming summit will address key issues including soybean trade, Taiwan tensions, and the detention of Hong Kong media tycoon Jimmy Lai. Trump also hinted at future meetings with Xi in both China and the United States and expressed confidence that a “deal with China” is imminent.

This renewed dialogue offers hope for de-escalation in a trade conflict that has disrupted global markets and technology supply chains.