US and China Outline Framework for Trade Agreement Ahead of Leaders' Meeting

The United States and China have established a framework for a potential trade agreement, addressing key issues such as tariffs, rare earth minerals, and agricultural purchases, ahead of the upcoming meeting between President Donald Trump and President Xi Jinping.

Treasury Secretary Scott Bessent stated that the framework includes a "final deal" on TikTok's U.S. operations and a deferral of China's proposed export controls on rare earth minerals. He expressed confidence that the threatened 100% tariff on Chinese goods would not be implemented, while China is expected to resume substantial soybean purchases from the U.S.

Both nations aim to prevent further escalation in their ongoing trade dispute. The leaders are scheduled to meet on Thursday in South Korea.

Bessent met with senior Chinese trade officials during the Association of Southeast Asian Nations (ASEAN) summit in Malaysia, describing the discussions as "constructive." He noted that the countries had "reached a substantial framework for the two leaders," adding, "The tariffs will be averted."

The Chinese government confirmed that both negotiating teams "reached a basic consensus on arrangements to address their respective concerns" and agreed to "further finalize specific details."

Since President Trump's return to office, he has imposed and threatened significant tariffs on various countries, including China, aiming to bolster U.S. manufacturing and employment. In response to China's tightened restrictions on rare earth exports, Trump had threatened an additional 100% tariff on Chinese goods starting in November. China processes approximately 90% of the world's rare earths, essential for producing electronics, making their supply a critical bargaining point.

Regarding agricultural trade, China, the world's largest soybean buyer, had halted orders from the U.S., impacting American farmers. Bessent indicated that the boycott might soon end, stating, "I believe when the announcement of the deal with China is made public that our soybean farmers will feel really good about what's going on for this season and the coming seasons for several years."

On the matter of TikTok, Bessent mentioned that a deal had been agreed upon concerning the app's U.S. operations, with Trump and Xi set to "consummate that transaction on Thursday." The U.S. has sought to separate TikTok's U.S. operations from its Chinese parent company, ByteDance, over national security concerns. The White House previously announced that U.S. companies would control TikTok's algorithm, and Americans would hold six of seven board seats for the app's U.S. operations.

Additionally, the U.S. announced trade deals with Malaysia and Cambodia and frameworks agreed upon with Thailand and Vietnam.