The United States and China officials reported on Saturday in Kuala Lumpur “very constructive” discussions, signaling cautious optimism as the two largest economies attempt to dodge a new round of trade wars. The talks are taking place before an anticipated meeting between President Donald Trump and Chinese President Xi Jinping at the forthcoming ASEAN summit. The Washington had threatened hefty tariffs on Chinese goods starting November 1, following Beijing’s new export controls on critical rare earth minerals.
US-China Fragile Trade Truce on the Line
The recent flare ups have lamentably tested the fragile trade truce achieved via months of toil by US Treasury Secretary Scott Bessent, Trade Representative Jamieson Greer and Chinese Vice Premier He Lifeng. Four prior meetings since May sought to stabilize trade relations.
One spokesperson from the US Treasury confirmed “Today’s talks have concluded. They have been very constructive and we expect them to resume in the morning.” Both sides are now striving to set the stage for a rather sensitive Trump-Xi summit.
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Key Negotiation Points: Tariffs, Technology & Agriculture
The list for the top meeting includes interim fixes on tariffs, Chinese purchase of US soybeans and restrictions on technology transfers. On his way to his first Asia tour since taking office, President Trump stressed the importance of addressing issues affecting American farmers and security concerns pertaining to Taiwan. The detention of Hong Kong media tycoon Jimmy Lai is also understood to be a possible point for discussion encapsulating larger issues around human rights.
In Order Not to See a Re-Escalation
Both nations want to avoid another round of triple-digit tariffs. The truce brokered in Geneva earlier this year had allowed a temporary lowering of US inbound tariffs to about 55% and Chinese inbound tariffs to about 30%, reestablishing vital flows of rare earth magnets.
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The arrangement began to crack very soon after Washington expanded on its export blacklist at the end of September, prompting China to commence export restrictions intended for military applications a maneuver that the US branded a “global supply chain power grab.”
Trade Deal is at Stake for Global
The Phase One trade deal under scrutiny and the temporary truce scheduled to expire on November 10, the forthcoming Trump-Xi meeting is burdened with a great deal of economic significance. While both sides are maneuvering to balance domestic interests with international optics, the rest of the world is holding its breath the result in Kuala Lumpur and subsequent engagements may well foretell a thawing or further fracturing of trade relations.
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Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or investment advice regarding trade policies.
