Senior U.S. and Chinese economic officials have agreed on the framework of a potential trade deal, setting the stage for a high profile meeting between U.S. President Donald Trump and Chinese President Xi Jinping later this week. The agreement aims to pause new tariffs and ease export restrictions as both nations seek to stabilize their strained economic relationship.
The breakthrough came during talks on the sidelines of the ASEAN Summit in Kuala Lumpur, where negotiators reached a provisional understanding to halt escalating trade measures that have unsettled global markets.
Tariffs and Rare Earth Controls Temporarily Suspended
According to U.S. Treasury Secretary Scott Bessent, the framework agreement will prevent the planned 100% tariffs on Chinese imports from taking effect on November 1. In exchange, Beijing is expected to delay implementation of its new licensing regime on rare earth minerals and magnets key materials used in high tech and defense industries for at least one year while the policy is reviewed.
“China is ready to make a deal,” Bessent said, calling the progress “a positive step toward restoring balance and predictability to global trade.”
If finalized, the deal would represent the most significant thaw in U.S.-China trade relations since tensions escalated earlier this year over technology access, investment restrictions, and export controls.
Background: A Longstanding Trade Rivalry
The United States and China have been locked in a protracted trade dispute over market access, intellectual property rights, and strategic technology. Successive rounds of tariffs since 2018 have disrupted supply chains and weighed heavily on both economies.
Washington has accused Beijing of unfair trade practices, while China has criticized U.S. tariffs as protectionist. Despite several rounds of negotiations and temporary truces, lasting progress has proven elusive making the current breakthrough particularly significant.
Global Implications
A formal agreement between the world’s two largest economies could ease pressure on global manufacturing and commodity markets, especially as supply chains continue to recover from pandemic era disruptions. Analysts say a temporary pause in tariff escalation may also boost investor confidence across Asia ahead of the holiday trading season.
Both Trump and Xi are scheduled to meet later this week to finalize the terms of the deal, which could define the next phase of bilateral economic engagement between Washington and Beijing.
