Daijiworld Media Network – Kuala Lumpur
Kuala Lumpur, Oct 27: Top trade negotiators from the United States and China have reached a preliminary understanding on several key issues, paving the way for President Donald Trump and Chinese President Xi Jinping to finalize a comprehensive trade agreement aimed at easing months of economic tensions between the world’s two largest economies.
Following two days of intensive discussions in Malaysia, officials from both sides confirmed progress on contentious matters, including export controls, fentanyl trafficking, and shipping levies. Chinese envoy Li Chenggang said the talks resulted in a “preliminary consensus,” while the US side signaled optimism about sealing a final deal later this week.
US Treasury Secretary Scott Bessent told CBS News that Trump’s earlier threat of imposing 100% tariffs on Chinese goods was “effectively off the table.” He also revealed that China is expected to resume substantial soybean imports and delay the implementation of sweeping rare-earth export restrictions. “The threat of the 100% tariff is gone, as is the risk of China launching a global export control regime,” Bessent said.
Bessent also hinted that the upcoming Trump-Xi meeting would feature a wide-ranging agreement — extending the existing tariff truce, resolving disputes over TikTok, and ensuring the continued supply of rare-earth materials crucial for high-tech manufacturing. The leaders are also expected to discuss a global peace initiative, with Trump expressing hopes of securing China’s support in resolving the Russia-Ukraine conflict.
The breakthrough marks a dramatic shift from recent weeks, which saw heightened tensions after Beijing expanded export restrictions and Trump retaliated with tariff threats. Markets responded positively to the news, with risk-sensitive currencies such as the Australian and New Zealand dollars rising against the US dollar, while safe-haven assets like the yen and Swiss franc slipped. Bitcoin also extended gains for a fourth consecutive day.
US Trade Representative Jamieson Greer said progress on rare-earth negotiations was a major objective of the Malaysia talks. “We’re moving toward that goal very well,” he told Fox News Sunday.
Trump, attending the ASEAN Summit in Kuala Lumpur, sounded confident about striking a deal. “They want to make a deal, and we want to make a deal,” he told reporters, hinting at follow-up meetings in both Beijing and Washington.
Chinese envoy Li Chenggang described the talks as “intense but constructive,” and said both nations had found common ground on several pressing issues, including fentanyl controls and shipping fees. He suggested that Washington may reduce the 20% tariff it had imposed to pressure Beijing on the flow of fentanyl precursors.
The talks also addressed reciprocal levies on shipping services, with both sides agreeing to seek a resolution that benefits global trade. Li emphasized that a stable China-US economic relationship was “in the best interest of both countries and the world.”
A revival of Chinese soybean purchases could deliver a political win for Trump, whose support among US farmers was hit hard when China halted imports last year following tariff escalations. Beijing had previously bought more than $13 billion worth of US soybeans annually — about one-fifth of America’s total crop.
The negotiations, held at Kuala Lumpur’s Merdeka 118 tower, included senior Chinese officials led by top economic planner He Lifeng and Vice Finance Minister Liao Min. The US delegation was led by Trade Representative Jamieson Greer.
Trump and Xi are expected to meet on Thursday for their first face-to-face discussion since Trump’s return to the White House. “We’ll be talking about a lot of things,” Trump said. “I think we have a really good chance of making a very comprehensive deal.”