Thursday’s meeting between Presidents Donald Trump and Xi Jinping will be one of the key diplomatic events of the year, with US-China economic relations at stake after several rounds of escalating tensions and temporary truces.
Trump told reporters on Air Force One on Monday that while nothing had been agreed yet, he felt comfortable going into a meeting with Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation summit in South Korea.
US Treasury Secretary Scott Bessent said at the same briefing that the framework to be finalized by Trump and Xi was created during weekend talks with China, whose delegation was led by Vice Premier He Lifeng.
The main issues on which the two sides have argued include the following:
China’s crackdown on exports of rare earths – critical components of industrial supply chains whose processing is dominated by Chinese firms – has been a key pain point for the US this year. The Trump administration has sought to roll back more sweeping controls that Beijing announced on Oct. 9 and were supposed to be in place in December. These require overseas firms to obtain Beijing’s approval for shipments of goods with trace amounts of certain Chinese rare earths.
Bessent said on Sunday that he believed China would delay its latest restrictions on rare earths “for a year while it reviews the move”.
The U.S. has expanded its own export limits this year, with Beijing in particular calling on Sept. 29 to vastly expand controls on sales of semiconductor equipment to subsidiaries of Chinese companies already on Washington’s so-called entity list. The move could affect thousands of China-linked businesses around the world.
Bessent said the framework he negotiated does not include the US lifting its controls, although analysts believe that will indeed be an area where China gets a quid-pro-quo concession.
Trump imposed a 20% import tax on Chinese goods earlier this year over Beijing’s alleged failure to curb exports of the drug fentanyl and its precursors. Chinese Vice Commerce Minister Li Chenggang said over the weekend that a preliminary consensus had been reached on fentanyl, without offering details, raising the prospect of easing tariffs.
The US and China are finalizing a deal to spin off the US operations of social media platform TikTok from its owner ByteDance Ltd. based in Beijing after talks in Madrid in September.
Trump signed an executive order on September 25 that TikTok US will be majority owned and controlled by Americans. And the owners rent a copy of the algorithm from ByteDance, which Oracle then retrains. However, there is no official information that Beijing has approved the deal. Trump said he would talk to Xi about the issue and may sign a final deal on Thursday.
China began levying special port charges on US-owned and built vessels on October 14, the same day Washington imposed charges on large Chinese ships entering US ports. Beijing has also sanctioned US units of the South Korean shipping giant for aiding the US government’s investigative activities.
Chinese Trade Representative Li said the two countries would address the charges, suggesting an agreement had been reached after talks over the weekend.
Beijing is also using agriculture as leverage in trade negotiations, holding back purchases of US soybeans since the start of this harvest season – something that has put US farmers under financial stress. Bessent said China was expected to make “substantial” purchases of US soybeans, although the Chinese official figure listed agricultural products as an area where “preliminary consensus” had been reached.
China currently faces a 55% surcharge on its exports to America as a result of the Trump administration’s April tax hike. The United States has threatened to impose an additional 100% tariff on Chinese goods from November 1 following Beijing’s new curbs on rare earths. After the talks in Kuala Lumpur, Bessent told CBS News that the newly looming fee “is effectively off the table.”
The next date is looming on November 10. That’s when the last 90-day truce on even higher US tariffs – up to 145% – is set to expire. Bessent indicated that at some point the pause at this level of tariffs could extend beyond the 90-day period seen in recent rounds.
The Trump administration has also launched an investigation in recent days into whether China complied with a limited trade deal signed in 2020 during Trump’s first term. The move could potentially open the door to new tariffs. But Trump suggested on Monday that he may drop the investigation entirely based on upcoming talks with Xi.
While China and the US have so far largely limited their talks to economic issues, Bessent indicated that when the two leaders meet, they will also discuss a global peace plan – after Trump publicly said he hoped to get Xi Jinping’s help in dealing with Russia’s war in Ukraine.
Xi and Russian President Vladimir Putin have brought their nations closer together since Moscow’s full-scale invasion of Ukraine in early 2022, with China providing its neighbor with economic and diplomatic support.
This article was generated from an automated news agency source without text modification.
