US and China agree framework of trade deal ahead of Trump-Xi meeting

The United States and China have agreed to the framework for a possible trade deal that will be discussed at their respective leaders’ meeting later this week, the US Treasury Secretary said.

Scott Bessent told BBC’s US news partner CBS that this included a “final deal” on TikTok’s US operations and a postponement of China’s tougher controls on rare earth minerals.

He also said he did not expect the 100% tariffs on Chinese goods threatened by U.S. President Donald Trump to take effect, while China would resume substantial purchases of soybeans from the United States.

Both countries are seeking to avoid a further escalation in the trade war between the world’s two largest economies.

Trump and Chinese President Xi Jinping are scheduled to hold talks in South Korea on Thursday.

Bessent met with senior Chinese trade officials on the sidelines of the Association of Southeast Asian Nations (ASEAN) summit in Malaysia, which Trump is also attending as part of an Asia tour. Beijing said it had “constructive” discussions.

Bessent said the countries had “reached a substantial framework for both leaders,” adding: “Tariffs will be avoided.”

The Chinese government said in a statement that the two negotiating teams “reached a basic consensus on arrangements to address their respective concerns.”

“Both sides agreed to further finalize specific details,” they added.

Since Trump returned to the White House, he has imposed and threatened drastic tariffs on imports from abroad in various countries, arguing that the policy would help boost U.S. manufacturing and employment. The introduction of tariffs has led many countries, including the United Kingdom, to enter into new agreements with the United States.

But the highest levies he threatened were imposed on China. Beijing responded with its own measures, although both sides agreed to suspend implementation of the taxes while pursuing a trade deal.

However, earlier this month, Trump announced he would impose additional 100% tariffs on Chinese goods starting in November in response to China’s tightening restrictions on the export of rare earths, materials critical to the production of many electronic devices. The US president accused Beijing of “becoming very hostile” and trying to keep the world “captive”.

China processes about 90% of the world’s rare earths, which go into making everything from solar panels to smartphones, making their supply to U.S. manufacturers a key bargaining chip.

The last time Beijing tightened its export controls — after Trump raised tariffs on Chinese goods earlier this year — there was an outcry from many U.S. companies dependent on those materials.

China will “delay this for a year while we review it,” Bessent said on Sunday on another news show, This Week.

Another point of contention concerns soybeans, of which China is the world’s largest buyer. As the trade war began to escalate, China halted all orders, hurting American farmers.

Bessent hinted that the boycott might end soon, but declined to give details.

“I’m actually a soybean farmer, so I felt that pain as well… I think we’ve addressed the farmers’ concerns,” he said on This Week.

“I think when the announcement of the China deal comes out, our soybean farmers will feel really good about what’s happening for this season and for seasons to come for several years.”

Bessent also said a deal had been reached on the U.S. arm of video-sharing platform TikTok, with Trump and Xi expected to “consummate this transaction on Thursday.”

The United States has sought to take the app’s U.S. operations away from Chinese parent company ByteDance over national security concerns.

TikTok was previously told it had to sell its U.S. operations or face closure, but Trump delayed implementing the ban four times to facilitate negotiations and extended the deadline again until December.

The White House announced last month that U.S. companies would control TikTok’s algorithm and that Americans would fill six of the seven board seats for the app’s U.S. operations.

While Trump initially called for a ban on TikTok during his first term, he has since changed course. He turned to the hugely popular platform to build support among young Americans during his successful 2024 presidential campaign.

On Sunday, Washington also announced trade deals with Malaysia and Cambodia and frameworks with Thailand and Vietnam.