U.S. Treasury Secretary Scott Bessent announced on Sunday that the United States and China have agreed on a “very substantial framework” for a trade deal designed to head off a threatened 100 percent U.S. tariff on Chinese goods. The accord, forged during talks in Kuala Lumpur with Chinese Vice Premier He Lifeng, is intended as a scaffold for a full agreement to be finalized by President Donald Trump and Chinese President Xi Jinping.
Under the framework, the U.S. would pause its planned sweeping tariff increase while China agrees to defer its restrictions on rare earth exports, a key component in modern electronics and defense supply chains, for about a year. Bessent described the negotiations as “constructive, far-reaching, in-depth” and said they set the stage for leaders to settle final terms at their impending summit.
China, however, has offered more cautious public language, acknowledging only that a “preliminary consensus” was reached and stressing that any agreement must still pass internal approval processes. Among the central items to be resolved, Bessent said, are U.S. demands for increased Chinese purchases of American agricultural goods especially soybeans, and cooperation in combating illicit fentanyl flows into the United States. The framework also reportedly includes a restructuring plan for TikTok to avoid a U.S. ban, giving new U.S. investors control while limiting Chinese ownership.
The agreement arrives amid intensifying tensions: China earlier imposed tougher export controls on rare earth minerals, prompting Trump to threaten retaliatory tariffs. Markets responded with relief as the move de-escalates the immediate risk of a tit-for-tat tariff spiral. Still, observers note the deal is provisional: its success hinges on whether Trump and Xi ratify the framework and whether each side follows through on promised concessions.
The forthcoming Trump-Xi meeting, scheduled for Thursday on the sidelines of an Asia summit, is expected to determine whether the framework becomes a binding pact or merely a temporary truce. The magnitude of the stakes is high: a failure could rekindle trade hostilities, with ripple effects across global markets and supply chains.
