Beijing: The US and China have reached a tentative framework for a trade deal that will be a focal point of discussions when President Donald Trump meets Chinese President Xi Jinping later this week, as confirmed by the US Treasury Secretary.
According to BBC, Scott Bessent shared with CBS that the framework includes a finalized agreement concerning TikTok’s US operations and a temporary deferral on China’s stringent controls over rare earth minerals. He indicated optimism about averting the 100% tariff on Chinese imports that President Trump had threatened, while China has agreed to resume significant soybean purchases from the US. Bessent stated that the two countries have “reached a substantial framework for the two leaders,” and assured that the proposed tariffs will be avoided.
A statement from the Chinese government confirmed that both negotiating teams have “reached a basic consensus on arrangements to address their respective concerns,” and emphasized that “both sides agreed to further finalize specific details.”
President Trump’s use of tariffs has been a key strategy since he returned to the White House, aimed at revitalizing US manufacturing and jobs by imposing tariffs on imports from various countries. China, facing the steepest tariffs, has responded with countermeasures, though both nations have agreed to delay implementing these tariffs while working towards a trade agreement.
Earlier this month, Trump announced a plan to impose a 100% tariff on Chinese goods starting in November, in reaction to China’s tightened rare earth export controls. Rare earths are crucial for electronics production, and China’s control of around 90% of the global supply makes this a significant leverage point.
Scott Bessent indicated that China will “delay that for a year while they re-examine it,” during an appearance on the news show This Week.
The trade war has also impacted the soybean market, with China being the largest buyer. As tensions rose, China halted soybean orders, affecting US farmers. Bessent hinted at the potential end of this halt, emphasizing that US farmers’ concerns have been addressed and that they will be satisfied with the forthcoming deal.
A significant development is the agreement on TikTok’s US operations. The US has been pressing to separate TikTok’s US arm from its Chinese parent company, ByteDance, over national security concerns. An agreement is in place, awaiting finalization by Trump and Xi.
Additionally, the US announced new trade deals with Malaysia and Cambodia, and framework agreements with Thailand and Vietnam. These moves aim to strengthen partnerships in a region heavily impacted by Trump’s tariffs. While the US will maintain a tariff rate of up to 20% on goods from these countries, exceptions may be carved out for certain products.
In Malaysia, Trump emphasized the US’s commitment to being a strong partner in the region, highlighting agreements involving critical minerals with Thailand and Malaysia. Vietnam has also agreed to purchase Boeing jets worth over $8bn from the US, alongside American agricultural goods, marking “unprecedented” trade access.