US, China reach trade deal outline before Trump-Xi summit

(MENAFN) The United States and China have reached a preliminary framework for a potential trade deal, which will be discussed when their leaders meet later this week, according to reports.

US Treasury Secretary Scott Bessent confirmed that the agreement includes a "final deal" regarding TikTok's operations in the US and a postponement of China’s tightened controls on rare earth minerals. He also indicated that the threatened 100% tariff on Chinese imports by President Donald Trump is unlikely to be implemented, and that China will resume significant soybean purchases from the US.

Both nations are seeking to prevent further escalation in the ongoing trade tensions between the world’s two largest economies. Trump and Chinese President Xi Jinping are scheduled to meet on Thursday in South Korea.

Bessent, who met with senior Chinese trade officials on the sidelines of the ASEAN summit in Malaysia, described the discussions as "constructive" and said, "The tariffs will be averted." China also noted that both sides "reached a basic consensus on arrangements to address their respective concerns" and agreed to finalize the remaining details.

Since returning to the White House, Trump has imposed and threatened broad tariffs on various countries to boost US manufacturing and jobs. China has been the primary target of these measures, responding with its own restrictions, though both sides agreed to delay implementation while negotiations continue. Earlier this month, Trump had threatened a 100% tariff on Chinese goods in response to Beijing tightening rare earth export restrictions, which are crucial for electronics production.

China currently processes around 90% of the world’s rare earths, giving it a strategic advantage in negotiations. Bessent stated that China will "delay that for a year while they re-examine it."

Soybeans, a major US export, have also been a point of contention. China’s suspension of purchases during the trade dispute caused difficulties for American farmers. Bessent hinted that the boycott may soon end, saying, "I'm actually a soybean farmer, so I have felt this pain too... I think we have addressed the farmers' concerns," adding, "I believe when the announcement of the deal with China is made public that our soybean farmers will feel really good about what's going on for this season and the coming seasons for several years."

TikTok was another key issue in the negotiations. Bessent noted that a deal had been agreed upon regarding TikTok’s US operations, with Trump and Xi set to "consummate that transaction on Thursday." The app’s US operations are to be separated from its Chinese parent ByteDance due to national security concerns, with US companies controlling its algorithm and six of seven board seats.

In addition to US-China talks, Washington announced trade deals with Malaysia and Cambodia and framework agreements with Thailand and Vietnam. Trump stated, "Our message to the nations of South East Asia is that the United States is with you 100% and we intend to be a strong partner for many generations." The deals aim to expand access to rare earth minerals and other metals beyond China, while promoting US agricultural and aerospace exports.

Vietnam, for example, agreed to purchase over $8 billion in Boeing jets along with other American goods.

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