Preliminary trade talks between US and Chinese officials have been described as providing a “very successful” framework for the expected summit meeting of Presidents Trump and Xi in South Korea on Thursday.
Treasury Secretary Scott Bessent said the weekend talks were “constructive, far-reaching and in-depth”.
China’s senior trade negotiator Li Chenggang said the two sides reached a “preliminary consensus” and will next go through their respective internal approval processes.
The positive tone has been welcomed in the region, with the Australian dollar gaining 0.4% against the greenback in early trade, while the NZ dollar is up 0.5%.
Mr Bessent said talks on the sidelines of the ASEAN Summit in Kuala Lumpur had eliminated the threat of Trump’s 100% tariffs on Chinese imports starting November 1.
He also said he expected China to delay implementation of its rare earth minerals and magnets licensing regime by a year while the policy was reconsidered.
The Chinese view was somewhat more circumspect.
“The US position has been tough, whereas China has been firm in defending its own interests and rights,” Mr Li said.
“We have experienced very intense consultations and engaged in constructive exchanges in exploring solutions and arrangements to address these concerns.”
The potential agreement is expected to cover export controls, fentanyl, shipping levies and a deferral of China’s rare earth export restrictions for a year.
Mr Bessent said he anticipated that a tariff truce with China would be extended beyond its November 10 expiration date, and that China would revive substantial purchases of US soybeans after buying none in September while favouring soybeans from Brazil and Argentina.
US soybean farmers “will feel very good about what’s going on both for this season and the coming seasons for several years” once the deal’s terms are announced, Mr Bessent told the ABC program This Week.
The deal is also set to address the ongoing sale of TikTok and maintain the flow of rare earth magnets critical for advanced manufacturing.
Mr Trump arrived in Malaysia on Sunday for a summit of the Association of Southeast Asian Nations, his first stop in a five-day Asia tour that is expected to culminate in Thursday’s face-to-face with Mr Xi in South Korea.
After the weekend talks, Mr Trump struck a positive tone, saying: “I think we’re going to have a deal with China.”
Mr Trump had threatened new 100% tariffs on Chinese goods and other trade curbs starting on November 1 in retaliation for China’s expanded export controls on rare earth magnets and minerals.
China controls more than 90% of the world’s supply of the materials which are essential for high-tech manufacturing, from electric vehicles to semiconductors and missiles.
The export controls and Trump’s threatened retaliation would disrupt a delicate six-month truce under which China and the US reduced tariffs that had quickly escalated to triple-digit rates on each side.
The US and Chinese officials said that, in addition to rare earths, they discussed trade expansion, the US fentanyl crisis, US port entrance fees and the transfer of TikTok to US ownership control.
Mr Bessent told NBC’s Meet the Press program that the two sides have to iron out details of the TikTok deal, allowing Trump and Xi to “consummate the transaction” in South Korea.
With Reuters
