BBC Photo: Donald Trump and his Chinese counterpart Xi Jinping are holding talks in South Korea.
Source: BBC News
DST News: The United States and China have reached a preliminary framework for a potential trade agreement that will be discussed when President Donald Trump and President Xi Jinping meet later this week, according to the US Treasury Secretary.
Scott Bessent told CBS, a partner of the BBC, that the understanding includes a finalized agreement concerning TikTok’s US operations and a one-year postponement of China’s restrictions on rare earth mineral exports. He added that the proposed 100% tariff on Chinese imports, threatened by Trump, is unlikely to be implemented, while China will resume major soybean purchases from the US.
Both nations are seeking to de-escalate the ongoing trade tensions between the world’s two largest economies. The two leaders are expected to meet on Thursday in South Korea. Bessent met senior Chinese trade negotiators on the sidelines of the ASEAN summit in Malaysia, where Trump is also attending as part of his Asian tour. Beijing described the discussions as “constructive.”
Bessent said both sides had “reached a substantial framework for the two leaders,” adding that “the tariffs will be averted.” China confirmed in a statement that both delegations had achieved “a basic consensus” and would “finalize specific details” soon.
Trump’s Tariff Policy
Since returning to office, Trump has aggressively pursued tariff-based strategies to boost domestic manufacturing and employment. While these policies have led to new trade deals with countries like the UK, the most severe tariff threats have targeted China.
Earlier this month, Trump announced plans to impose an additional 100% tariff on Chinese goods, citing Beijing’s tightened export restrictions on rare earth elements—vital materials for producing electronics. He accused China of acting “hostile” and attempting to “hold the world captive.”
China processes roughly 90% of the world’s rare earths, which are essential for manufacturing items such as smartphones and solar panels. The new understanding delays China’s export restrictions for one year while both sides revisit the policy, Bessent said.
Soybean Sales Resuming
Another key issue is soybeans. China, the largest buyer globally, had suspended US purchases during the height of the trade war, significantly impacting American farmers. Bessent, himself a soybean farmer, suggested that the embargo is likely to end, saying, “I think we have addressed the farmers’ concerns… Our soybean farmers will feel really good about what’s coming for this season and beyond.”
TikTok Agreement Finalized
Bessent also confirmed that a deal regarding TikTok’s US operations has been reached and will be officially completed during the Trump–Xi meeting. The US had long sought to separate the app’s American business from Chinese parent company ByteDance over national security concerns.
Under the arrangement, US companies will control TikTok’s algorithm, and Americans will occupy six of the seven board seats for its US arm. Trump, who once advocated for banning the app, later used TikTok as part of his 2024 campaign outreach to young voters.
Regional Trade Moves
In parallel, Washington announced several new trade agreements across Southeast Asia, including deals with Malaysia, Cambodia, Thailand, and Vietnam. The arrangements will boost trade in critical minerals and agricultural products while maintaining a 20% tariff cap, with potential exemptions for specific goods.
During his Malaysia visit, Trump reaffirmed Washington’s commitment to regional partners, saying, “The United States is with you 100%, and we intend to be a strong partner for many generations.”
Vietnam also confirmed an $8 billion purchase of Boeing jets and American agricultural products, part of what the White House called an “unprecedented” expansion in trade ties.
