A Fragile Truce: US-China Trade Framework Emerges Ahead of Xi-Trump Summit
In a
significant development that could reshape global trade dynamics, the United
States and China have reached a tentative framework for a trade deal just days
before President Donald Trump and Chinese President Xi Jinping are scheduled to
meet face-to-face in South Korea.
The agreement, brokered on the sidelines of the ASEAN summit in Malaysia, signals a potential thaw in relations after months of escalating tensions that threatened to spiral into a full-blown trade war.
US
Treasury Secretary Scott Bessent announced that the framework would avert the
imposition of 100% tariffs on Chinese imports, which were slated to begin on
November 1. The deal also includes a resolution on the contentious issue of
TikTok’s operations in the US, suggesting a broader scope than mere tariff
negotiations.
President
Trump, arriving in Malaysia for the summit, expressed optimism, stating, “I
think we’re going to have a deal with China,” hinting at a more conciliatory
tone than in previous months.
China,
for its part, agreed to delay export controls on critical minerals used in
fighter jets, smartphones, and electric vehicles for one year. These controls
had been a major point of leverage, given China’s dominance in the global
supply of rare earth elements.
Chinese
trade negotiator Li Chenggang described the talks as intense but constructive,
noting that both sides had reached a “preliminary consensus” and would now seek
internal approvals.
The
framework also aims to revive China’s substantial purchases of US soybeans, a
sector hit hard by Beijing’s retaliatory measures earlier this year. In
September, China halted all soybean imports from the US, opting instead for
Brazilian and Argentine sources. With China being the largest buyer of US
soybeans, accounting for half of the $24 billion in exports in 2024, this
reversal could offer a lifeline to American farmers.
The
broader implications of this framework extend beyond bilateral relations. A
deal between the world’s two largest economies could ease pressure on global
supply chains, particularly in the automotive sector across Europe and the UK,
which had been bracing for disruptions due to rare earth shortages.
The
agreement also appears to have catalyzed diplomatic momentum elsewhere, with
Brazil’s President Luiz Inácio Lula da Silva reporting a “positive” meeting
with Trump and initiating talks to resolve tariff disputes between their
nations.
Still,
the path ahead remains uncertain. The framework is not yet a finalized deal,
and both sides must navigate domestic political landscapes and competing
economic interests. Trump’s aggressive tariff strategy, dubbed “liberation
day,” had drawn criticism for its potential to destabilize global markets.
Meanwhile, Xi’s countermeasures demonstrated China’s willingness to assert its
economic clout.
As the
leaders prepare for their summit, the world watches closely. The stakes are
high, not just for Washington and Beijing, but for the entire global economy.
Whether
this framework becomes a durable agreement or another fleeting truce will
depend on the political will and strategic calculus of both nations.
For now,
it offers a glimmer of hope in an otherwise turbulent trade landscape.
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