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US and China have reached a framework agreement on trade ahead of Trump-Xi meeting. Here’s what we know
US and Chinese officials have reached a framework agreement, averting a potentially ruinous 157% tariff on Chinese goods while paving the way for a potential trade deal to be discussed between President Donald Trump and Chinese leader Xi Jinping later this week.
The apparent progress came during the first leg of Trump’s weeklong diplomacy tour in Asia, easing tensions between the world’s two biggest economies after weeks escalatory actions they slapped on each other.
Asia markets and US stock futures reacted positively to the news. Here’s what we know so far about the talks.
US and Chinese negotiators conducted their latest round of talks in Malaysia’s capital Kuala Lumpur, the first stop of Trump’s whirlwind diplomatic tour of Asia.
And it was shortly after Trump touched down on Sunday that the first positive trade talk signs emerged.
“I think we’ve reached a substantial framework for the two leaders who will meet next Thursday,” Treasury Secretary Scott Bessent said on ABC from Kuala Lumpur, where he and Trade Representative Jamieson Greer led the US delegation for the fifth round of in-person talks.
He also told CBS news that the 100% tariffs on Chinese goods that Trump previously threatened were “effectively off the table.”
All eyes are now on the expected meeting between Trump and Chinese leader Xi Jinping in South Korea on Thursday, which has already been colored by questions of whether it will even happen.
The meeting, the first between the pair during Trump’s second term, would happen on the sidelines of the Asia-Pacific Economic Cooperation CEO summit, where Trump is expected to deliver an address.
Beijing has yet to confirm the sit down will take place, however that is not unusual given how China’s government rarely does so until such talks are under way.
But the latest signaling from trade negotiators in Malaysia sets a more positive tone ahead of that closely watched meeting.
Frictions between the two countries ratcheted up swiftly in September after the US expanded its export blacklist to hit significantly more Chinese companies’ access to American technology, while China ramped up its own export controls on rare earth minerals.
Beijing’s expansion of restriction on the critical minerals, of which China holds a near-monopoly role in processing, prompted Trump to vow new 100% tariffs on Chinese imports, originally slated to take effect in November.
Neither side has provided full details of the framework, but Bessent said on NBC he anticipates the US would get “some kind of deferral” on rare-earth export controls, adding that the framework sets up Trump and Xi “to have a very productive meeting.”
