Top trade negotiators for the United States and China have reached a “preliminary consensus” on a new trade framework, signaling a significant de-escalation in the trade war that has rattled global markets. The deal was announced from Kuala Lumpur, Malaysia, on the sidelines of the ASEAN summit.
Key Takeaways:
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Tariffs Halted: The US has agreed to take the threatened 100% additional tariffs on Chinese goods “off the table.”
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China Defers Controls: In return, Beijing will defer its recently announced, sweeping export controls on rare-earth minerals, which are critical for electronics manufacturing.
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Agricultural Purchases: China has also reportedly agreed to make “substantial” purchases of US soybeans, a key point of negotiation.
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Framework for Leaders: This agreement establishes a framework for a more comprehensive deal to be finalized by President Donald Trump and President Xi Jinping at their upcoming meeting.
The talks, led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, concluded on Sunday after two days of intense negotiations. According to US officials, the framework also includes progress on resolving disputes over fentanyl trafficking and the status of TikTok.
The new consensus marks a significant cooling-off period in the trade war. Tensions had escalated earlier in the month when China announced its plan for rare-earth export controls, prompting the US threat of crippling tariffs. This truce is expected to bring stability to global markets, which have been volatile in response to the conflict between the world’s two largest economies.