Washington: The US and China have reached an agreement on the framework for a potential trade deal, which will be a critical topic of discussion when President Donald Trump and Chinese President Xi Jinping meet later this week, according to US Treasury Secretary Scott Bessent.
According to BBC, Bessent revealed in an interview with CBS that the framework includes a "final deal" regarding the US operations of TikTok and a postponement of China's tightened controls on rare earth minerals. He also mentioned that he does not foresee the 100% tariff on Chinese goods, previously threatened by President Trump, coming into effect. Additionally, China is set to resume significant soybean purchases from the US.
Bessent stated that both countries had "reached a substantial framework for the two leaders," emphasizing that "the tariffs will be averted." The Chinese government corroborated this by announcing that both negotiating teams have "reached a basic consensus on arrangements to address their respective concerns," and both sides agreed to further finalize specific details.
Since President Trump returned to the White House, his administration has imposed and threatened extensive tariffs on imports from various countries, with the intent of boosting US manufacturing and jobs. The most stringent tariffs have been directed at China, which has responded with its own measures. However, both nations have agreed to pause these levies while negotiating a trade agreement.
Earlier this month, Trump announced plans to impose an additional 100% tariff on Chinese goods starting in November, in response to China's tightened restrictions on the export of rare earths—crucial materials for electronics production. China processes about 90% of the world's rare earths, making them a key bargaining chip. Bessent noted that China would delay these restrictions for a year for further examination.
Soybeans remain another contentious issue, as China, the world's largest buyer, stopped all orders amid escalating trade tensions, impacting US farmers. Bessent hinted at the end of this boycott while avoiding specific details but expressed optimism about the future for US soybean farmers.
A significant development is the agreement on TikTok's US operations. The US aims to separate TikTok from its Chinese parent company, ByteDance, due to national security concerns. Trump has extended the deadline for TikTok to sell its US operations to facilitate negotiations, with the current deadline set for December.
In related news, the US announced several trade agreements with Malaysia, Cambodia, Thailand, and Vietnam, as part of efforts to strengthen trade relations in Southeast Asia. The region, heavily impacted by Trump's tariffs, will see continued US tariff rates of up to 20% on their goods, with potential exemptions on specific products. The agreements include critical minerals trade with Thailand and Malaysia and a significant Boeing jets purchase by Vietnam.
President Trump emphasized the US commitment to being a strong partner in Southeast Asia during his Asian tour, underscoring the strategic importance of these agreements in diversifying mineral supply and bolstering trade relations beyond China.