A preliminary US-Chinese agreement on minerals and tariffs before the Trump-Xi meeting economy

American and Chinese officials have prepared a framework for a trade agreement in preparation for presenting it to US President Donald Trump and Chinese President Xi Jinping at their meeting later this week. If approved, US customs duties on China and Chinese restrictions on exports of strategic minerals will be suspended.

US Treasury Secretary Scott Besent said that the talks that took place on the sidelines of the Association of Southeast Asian Nations (ASEAN) summit in Kuala Lumpur removed Trump’s threat to impose 100% tariffs on Chinese imports starting on November 1.

Besant expects China to postpone the implementation of the strategic minerals licensing system for a year until it reconsiders this policy.

Chinese officials were more cautious about the talks, and did not provide any details about the results of the meetings.

Trump and Xi are scheduled to meet on Thursday on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, South Korea. The White House officially announced the anticipated talks between Trump and Xi, but China has not yet confirmed the upcoming meeting.

“I think we have a very successful framework that the leaders will discuss on Thursday,” Besant told reporters.

Besant and US Trade Representative Jamieson Greer met with Chinese Vice Premier He Lifeng and chief trade negotiator Li Chenggang on the sidelines of the ASEAN meeting in a fifth round of in-person discussions since last May.

Besant said he expects the tariff truce with China to be extended beyond its expiration date of November 10, and for China to resume large purchases of US soybeans after stopping purchases last September and choosing to buy from Brazil and Argentina.

Picent added in statements to ABC that American soybean farmers “will feel very comfortable about what happens this season and the coming seasons for several years” once the terms of the agreement are announced.

For his part, Greer told the Fox News Sunday program that the two sides agreed to suspend some punitive measures, and found “a path forward that allows us to obtain more strategic minerals from China and try to balance our trade deficit through American sales.”

Chinese caution

Li Chenggang confirmed that the two sides have reached a “preliminary consensus,” and the agreement will then undergo internal reviews by each party for approval.

He said: “The position of the United States was firm, while China was strict in defending its interests and rights. We held very extensive consultations and engaged in constructive discussions to explore the solutions and arrangements necessary to address these concerns.”

Trump arrived in Malaysia today to attend the ASEAN Summit, which is his first stop on his five-day Asian tour, which is expected to conclude with a direct meeting with Chinese President Xi in South Korea on October 30.

After the talks that took place between the two sides, Trump spoke in a positive tone, saying, “I believe we will reach an agreement with China.”

Trump threatened to impose new 100% tariffs on Chinese goods and other trade restrictions starting November 1, in response to China expanding export controls on strategic minerals.

China controls more than 90% of the world’s supply of these materials, which are essential for high-tech manufacturing from electric cars to semiconductors and missiles. Export controls and Trump’s threat of retaliation would disrupt a sensitive six-month truce under which China and the United States reduced tariffs that quickly escalated to double-digit rates on each side.

US and Chinese officials said they also discussed trade expansion, the fentanyl crisis, entry fees at US ports, and the transfer of ownership of TikTok to the United States.

Picente told NBC’s “Meet the Press” that the two sides must work out the details of the TikTok deal, allowing Trump and Xi to “close the deal” in South Korea.

Discussion points

On the sidelines of the ASEAN summit, Trump hinted at the possibility of holding meetings with Xi in China and the United States.

He said: “We agreed to meet. We will meet them later in China, and we will meet in the United States, either in Washington or at Mar-a-Lago,” referring to the US President’s resort in Florida.

Among the issues that Trump will raise with Xi are China’s purchases of American soybeans, concerns about Taiwan, and other media files.

The detention of the founder of the now-defunct pro-democracy newspaper Apple Daily has become the most prominent example of China’s campaign to confiscate rights in Hong Kong.

Tensions have flared between the world’s two largest economies over the past few weeks, as the fragile trade truce failed to prevent the two sides from taking reciprocal measures such as imposing more sanctions and export restrictions and threatening other, more stringent steps.

The truce was reached after a first round of trade talks in Geneva in May and was extended in August.

China’s expanded controls on exports of strategic minerals have caused global shortages, prompting the Trump administration to consider denying China products that range from laptops to aircraft engines that use American software.