U.S. and China Reach Preliminary Trade Agreement Framework

Chinese and American trade negotiators announced on Sunday that they have agreed to a preliminary framework addressing tariffs and other issues, setting the stage for an anticipated meeting between President Donald Trump and President Xi Jinping later this week.

"We are moving forward to the final details of the type of agreement that the leaders can review and decide if they want to conclude together," said Jamieson Greer, the United States Trade Representative, speaking to reporters in Kuala Lumpur, Malaysia.

The discussions also touched upon extending the current pause on mutual tariffs, which is set to expire soon. China's top trade negotiator, Li Chenggang, described the talks as "candid and in-depth discussions" and noted that both sides had reached a "preliminary consensus."

The negotiators convened in Kuala Lumpur during a meeting of the Association of Southeast Asian Nations (ASEAN). President Trump is expected to meet with President Xi on Thursday at a separate economic meeting in South Korea.

Topics discussed included bilateral trade, export controls, reciprocal tariff extensions, and cooperation on combating fentanyl trafficking. Notably, the negotiations addressed rare earth metals, which are predominantly produced in China and are subject to stringent export controls imposed by Beijing earlier this year. Greer mentioned that the talks covered extending the tariff pause and rare earths, among other subjects.

Treasury Secretary Scott Bessent stated that the United States and China had reached a "very substantial framework." He anticipated that China might offer "some kind of deferral" on its rare earth export controls and indicated that the framework includes benefits for U.S. farmers, as China had ceased purchasing soybeans from the United States this autumn.

The discussions also addressed recent port fees imposed by the United States on ships built in China or owned by Chinese companies. In retaliation, China has placed tariffs on American-built ships and those owned by American companies or investors.

Both sides emphasized that a final deal has not yet been reached. Li stated that China and the United States "constructively explored a plan for appropriately dealing with some of the concerns of both sides" and mentioned that the next step involves each side fulfilling their respective domestic approval procedures.

Li's reference to "internal approval procedures" suggests that administrative steps may be forthcoming. China's Ministry of Commerce recently issued export regulations that immediately halted the transfer of technology needed to process rare earth metals out of China.

Rare earth metals are essential for various advanced manufacturing processes, including the production of cars, semiconductors, drones, factory robots, offshore wind turbines, and military equipment. China produces 90% of the world's refined rare earths and rare earth magnets, and up to 100% of certain types crucial for cutting-edge technologies and military applications.

China's Ministry of Commerce has imposed severe restrictions on rare earth exports since April 4. Further export controls are scheduled to take effect on November 8 and December 1, limiting shipments of products containing Chinese rare earth magnets and equipment for making electric car batteries.

The new regulations will also restrict exports of equipment like diamond saws, necessary for manufacturing semiconductors and solar panels. President Trump has threatened to impose 100% tariffs on Chinese goods if Beijing proceeds with these export controls.

Bessent echoed Greer and Li in cautiously portraying the progress achieved in the Kuala Lumpur talks, stating, "We have a very successful framework for the leaders to discuss."

Note: This article is based on information available as of October 26, 2025.