U.S. and China Reach Framework to Pause Tariffs and Delay Rare-Earth Rules Ahead of Trump-Xi Meeting

Top economic officials from the United States and China held talks on the margins of the ASEAN Summit in Kuala Lumpur on Sunday and sketched a framework for a trade understanding that President Donald Trump and President Xi Jinping could approve later this week, U.S. officials said. According to U.S. Treasury Secretary Scott Bessent, the discussions removed the immediate risk of Mr. Trump imposing 100% tariffs on Chinese imports beginning Nov. 1 and secured an expected one-year delay in the rollout of China’s licensing regime for rare earth minerals and magnets while Beijing reconsiders the policy.

Chinese officials described the exchanges in more guarded terms and did not provide detailed outcomes. The two leaders are scheduled to meet on Thursday on the sidelines of the Asia-Pacific Economic Cooperation summit in Gyeongju, South Korea, where U.S. and Chinese negotiators hope the principals will ratify the agreement; Beijing has not formally confirmed the summit-level meeting. “I think we have a very successful framework for the leaders to discuss on Thursday,” Bessent told reporters after he and U.S. Trade Representative Jamieson Greer met with Chinese Vice Premier He Lifeng and senior trade official Li Chenggang in the fifth round of in-person talks since May.

Bessent said he expects any tariff truce to extend beyond the Nov. 10 expiration date and predicted that China would resume substantial purchases of U.S. soybeans after foregoing shipments in September while sourcing supplies from Brazil and Argentina. He told ABC’s “This Week” that U.S. soybean growers would benefit both this season and in the years ahead once the terms are finalised. Greer told “Fox News Sunday” that both sides agreed to pause certain punitive measures and had identified a route to increase access to Chinese rare earths while seeking to rebalance trade flows with additional U.S. exports.

Li Chenggang characterised the talks as producing a “preliminary consensus” and said each side would now pursue internal approvals. “The U.S. position has been tough, whereas China has been firm in defending its own interests and rights,” Li said through an interpreter, describing the negotiations as intense but constructive in exploring arrangements to address outstanding concerns.

Mr. Trump, who arrived in Malaysia on Sunday for the ASEAN meeting as part of a five-day Asia trip, said after the talks that he expects a deal with China. His threatened new tariffs and other trade measures were framed as retaliation for China’s recent expansion of export controls on rare-earth magnets and minerals, controls that have raised alarms because China supplies more than 90% of the world’s rare-earth materials. The potential escalation threatened to unravel a fragile six-month truce that had limited tariff increases on both sides.

U.S. and Chinese officials said their discussions also covered a range of other issues, including trade expansion, the U.S. fentanyl crisis, U.S. port service fees and the structure of a proposed transfer of TikTok to U.S. ownership. Bessent told NBC’s “Meet the Press” that negotiators still needed to finalise aspects of the TikTok transaction before the leaders could “consummate the transaction” in South Korea.

On the sidelines in Kuala Lumpur, Mr. Trump suggested further meetings with Xi in China and the United States, saying they had agreed to meet again in both countries. His agenda for the leaders’ encounter is expected to include renewed Chinese purchases of soybeans, U.S. concerns about Taiwan, which China regards as its territory, and the case of Hong Kong media tycoon Jimmy Lai, a high-profile detention that has drawn international attention.

The talks come against a backdrop of rapidly renewed tensions: despite the truce reached after talks in Geneva in May and extended in August, recent weeks have seen additional sanctions, export curbs and threats of retaliation from both capitals. China’s tightened controls on rare-earth exports have already strained global supplies, prompting the United States to contemplate further export restrictions on software-enabled goods to China, according to prior reporting.