Are 100% tariffs no longer on the cards? US and China strike a ‘significant framework’ deal to ease rare earth tensions ahead of the Trump–Xi meeting
After months of escalating rhetoric and economic brinkmanship, Washington and Beijing appear to be stepping back from confrontation and moving toward a fragile détente.
In a development that could reshape the trajectory of global trade relations, US Treasury Secretary Scott Bessent announced on Sunday that the United States and China have established a “very substantial framework” aimed at halting the planned 100% tariffs on Chinese imports and deferring Beijing’s impending restrictions on rare earth exports.
Speaking to Reuters following two days of intense discussions in Kuala Lumpur, Bessent said the new understanding marks progress toward a more balanced and cooperative trade relationship between the two largest economies. The move also sets the tone for what could become a landmark meeting between President Donald Trump and President Xi Jinping next week.
“I’m not expecting the 100% tariffs to move forward,” Bessent told NBC’s Meet the Press. “We’re also looking at a suspension of China’s proposed rare earth export controls, which would be a big relief for both economies.”
Inside the Agreement: Key Components and Goals
While the complete terms of the framework have not been officially published, sources close to the talks outlined several pivotal elements designed to prevent another surge in trade hostilities. Among them:
Suspension of Trump’s proposed 100% tariffs on Chinese imports that were slated to take effect on November 1.
Temporary relief from China’s rare earth export restrictions, a move that could ease supply chain anxieties across the technology and defense industries.
US and China Find Common Ground :
Renewed negotiations on agricultural exports, with an emphasis on reopening China’s market to US soybeans and other farm products.
Enhanced cooperation to combat fentanyl trafficking, a major point of concern for Washington in addressing the US opioid crisis.
The talks in Kuala Lumpur were attended by high-ranking officials from both nations, including China’s Vice Premier He Lifeng, trade negotiator Li Chenggang, and US Trade Representative Jamieson Greer.
Li confirmed that both sides had reached a “preliminary consensus” not only on maintaining the current trade truce but also on collaborating in new areas such as export control dialogue and anti-drug efforts.
Diplomacy in Kuala Lumpur: A Calm Before the Summit
These negotiations took place on the sidelines of the ASEAN Summit, providing an opportunity for quiet diplomacy at a time when relations between Washington and Beijing had become increasingly strained. The meetings mark the most meaningful thaw in ties since the May 2025 trade pause, which had temporarily halted tariffs on hundreds of goods. That earlier truce was set to expire on November 10, raising fears of a renewed and potentially damaging tariff war.
Bessent emphasized that the latest framework could avert that scenario entirely, allowing both governments to regroup before the two leaders meet in South Korea next week.
“Leaders Optimistic: Trump Confident of a Deal with China”
“We now have a strong foundation for Presidents Trump and Xi to build on when they meet,” he said. “Final details will, of course, depend on what the two leaders decide, but the direction is positive.”
President Trump, who arrived in Malaysia on Sunday ahead of the ASEAN meetings, appeared upbeat when speaking to reporters.
“I figure out we’re going to reach a deal with China,” he remarked. “President Xi and I will talk very soon, and I believe we can move toward something that benefits both countries.”
The Rare Earth Factor: Why It Matters
The most critical—and potentially volatile—component of this evolving framework revolves around rare earth minerals. These elements, indispensable in the production of semiconductors, electric vehicle batteries, wind turbines, and military technology, have emerged as the focal point of economic rivalry between the US and China.
Beijing’s earlier announcement of export controls on these minerals had alarmed global markets. Given that China currently dominates over 70% of the world’s rare earth supply, any restriction risked disrupting industries dependent on advanced materials—from smartphones and solar panels to defense systems and electric vehicles.
“Supply Chains Breathe: Diplomatic Progress.
Washington had been preparing countermeasures, including possible restrictions on high-tech exports such as laptops and jet engines to China. Analysts feared that tit-for-tat measures could spiral into a full-scale technological and economic standoff.
If China now defers its export curbs, the decision would be seen as a cooling signal—one that could bring much-needed stability to international supply chains and reassure manufacturers facing rising costs. For companies dependent on precision technologies and sustainable energy materials, this diplomatic progress might ease months of uncertainty.
Balancing Rivalry with Pragmatism
The US and China have spent the better part of the last two years navigating an uneasy mix of competition and interdependence. While both governments have repeatedly clashed over technology access, market barriers, and strategic influence in the Indo-Pacific, neither side can afford a prolonged economic conflict.
Bessent’s announcement suggests that pragmatism may finally be prevailing over posturing. Economists say the “substantial framework” could serve as a reset button—not a final resolution, but a step back from the precipice.
“This agreement is less about victory and more about survival,” said an Asia-Pacific trade analyst in Singapore. “Both economies are facing inflation pressures, and neither can sustain another major trade shock before 2026.”
Agricultural exports, too, have been a politically sensitive issue for both nations. The United States, seeking to boost its farm sector, views renewed soybean exports as a tangible win, while China’s willingness to engage may signal its intent to stabilize domestic food prices amid slowing growth.
Next Steps: All Eyes on the Trump–Xi Meeting
As preparations begin for next week’s highly anticipated Trump–Xi summit, the Kuala Lumpur framework provides a crucial diplomatic foundation. While officials on both sides caution that no final deal has yet been signed, the groundwork appears strong enough to prevent new tariffs and calm investor fears in the near term.
Markets have already responded positively to the news, with Asian equities edging higher and commodity prices stabilizing after weeks of volatility. Investors are now watching closely to see whether the momentum can hold through the upcoming talks.
“Cautious Optimism: US–China Talks Could Reset Trade Across Asia”
If the two leaders can transform this framework into a more durable agreement, it could mark the most significant easing in US–China economic tensions in over half a decade—potentially resetting trade dynamics across Asia and beyond.
But if the talks falter, analysts warn, the reprieve may prove temporary.
For now, though, the mood is one of cautious optimism: a rare moment of calm in an otherwise stormy relationship.