U.S. and China outline trade truce framework
Proposed deal pauses tariffs and delays China’s rare-earths rules
Top economic officials from China and the United States reached a preliminary framework for a trade deal that could be finalized by Presidents Xi Jinping and Donald Trump later this week, U.S. officials said. Talks held on the sidelines of the ASEAN summit in Kuala Lumpur proposed pausing an imminent escalation of U.S. tariffs and delaying China’s planned rare‑earths export‑licensing regime, potentially averting immediate disruptions to high‑tech supply chains.
U.S. Treasury Secretary Scott Bessent said the discussions eliminated the risk of Washington imposing a 100% tariff on Chinese imports in November and that China would defer its rare‑earths and magnets licensing rules for about a year while the policy is reviewed. The proposed pause is intended to maintain access for U.S. manufacturers to critical inputs used in electric vehicles, semiconductors and defence systems. Chinese officials described the talks as producing a “preliminary consensus” that must clear internal reviews before leaders sign off.
The U.S. negotiating team, led by Bessent and Trade Representative Jamieson Greer, said the framework also encompasses commitments on increased Chinese purchases of U.S. soybeans—expected to resume after a pause in September—cooperation on precursor chemicals linked to the U.S. fentanyl crisis, and talks over governance of the short‑video app TikTok. Bessent indicated he expects any tariff truce to be extended beyond its current mid‑November expiration while negotiators continue work.
China remained circumspect and provided few public details, underscoring that any agreement requires final approval from Beijing’s leadership. Supply‑chain analysts noted that the rare‑earths element of the proposal is central because China dominates global separated rare‑earth‑magnet production, a choke point for advanced industries.
The proposed blueprint is set to be reviewed at an upcoming leaders’ meeting on the margins of the APEC summit in Gyeongju, South Korea; the U.S. has confirmed the planned Trump‑Xi encounter, while Chinese authorities have yet to publicly confirm it. If approved, the deal would represent a temporary truce intended to ease economic tensions, stabilize critical supply lines and create room for more detailed negotiations, even as both sides retain the option to resume measures if talks falter.
