The United States and China have reached a foundational agreement on trade terms, which will be a central topic of discussion when their leaders convene later this week. US Trade Secretary Scott Bessent shared that a final agreement is expected for TikTok’s US operations, alongside a possible delay in China’s stricter regulations concerning rare earth minerals.
Furthermore, Bessent indicated that President Trump’s previously threatened 100% tariffs on Chinese goods are unlikely to be implemented. In a positive sign for agricultural trade, China is set to resume significant purchases of soybeans from the US. These developments come as both economic giants aim to de-escalate the ongoing trade war.
Leaders from both nations are scheduled to meet on Thursday in South Korea. Bessent’s meetings with senior Chinese trade officials in Malaysia, on the sidelines of the ASEAN summit attended by President Trump, were described as “constructive.” He reported that a “substantial framework” has been established for the upcoming leader-level discussions, with the prospect of averting further tariffs.
Since President Trump’s return to office, his administration has utilized tariffs as a key policy tool, particularly targeting China, with the stated goal of boosting American manufacturing and employment. Beijing has responded in kind, though both countries agreed to a temporary pause on imposing new levies while pursuing a trade resolution.
However, Trump had raised the possibility of imposing 100% tariffs on Chinese products starting in November if China did not relax its export restrictions on rare earth minerals – materials vital for numerous high-tech manufacturing processes. China currently dominates the global supply chain for these minerals, processing approximately 90% of the world’s output, making them a significant point of negotiation.
Bessent mentioned that China has agreed to a year-long pause on these export restrictions while they reassess their policies. The US has also been concerned about the national security implications of TikTok’s US operations, owned by the Chinese company ByteDance. While TikTok was previously given an ultimatum to sell its US assets or face closure, Trump has repeatedly postponed the ban to allow for negotiations, most recently extending the deadline to December.
On the agricultural front, China’s halt of soybean orders during the trade dispute significantly impacted American farmers. Bessent, who identifies as a soybean farmer himself, expressed optimism that the new agreement will address the concerns of these farmers, anticipating positive outcomes for the current and upcoming seasons.