The United States and China have established the framework for a potential trade deal, which will be discussed during an upcoming meeting between their leaders. This framework includes an agreement regarding TikTok's US operations and a deferral on China's tightened controls over rare earth minerals, according to US trade secretary Scott Bessent. Bessent also stated that 100% tariffs on Chinese goods, previously threatened by US President Donald Trump, are not expected to be implemented, and China will resume substantial soybean purchases from the US.
Framework Details
US trade secretary Scott Bessent indicated that the agreement includes a "final deal" concerning TikTok's operations in the US. He also noted that China has agreed to defer its tightened controls on rare earth minerals for a year, allowing for re-examination. Bessent stated that he does not anticipate the 100% tariffs on Chinese goods, previously threatened by President Trump, will come into force. Additionally, China is expected to resume substantial purchases of soybeans from the United States. Beijing described its discussions with US officials as "constructive."
Upcoming Leaders' Meeting and Related Engagements
President Donald Trump and Chinese President Xi Jinping are scheduled to hold talks on Thursday in South Korea. This development follows a meeting between Scott Bessent and senior Chinese trade officials on the sidelines of the Association of Southeast Asian Nations (Asean) summit in Malaysia. President Trump is also attending the Asean summit as part of a tour of Asia.
Trade Policy Background and Rare Earths
Since re-entering the White House, President Trump has imposed and threatened various tariffs on imports, with significant levies directed at China. These policies, according to Trump, aim to boost US manufacturing and jobs. China has responded with its own measures. The two nations had previously agreed to postpone implementing levies while pursuing a trade deal.
President Trump had threatened new 100% tariffs on Chinese goods starting in November if China did not reverse its tightened restrictions on the export of rare earths. Rare earths are materials critical for the production of many electronic devices. China processes approximately 90% of the world's rare earths, which are used in products ranging from solar panels to smartphones. Bessent confirmed that China will "delay that for a year while they re-examine it."