The recent high-level trade talks between the United States and China concluded in Malaysia, with both sides reaching an agreement framework. On Thursday (October 30th), President Trump will meet with the Chinese Communist Party leader Xi Jinping in South Korea, where they may finalize this agreement framework. Trump had previously emphasized the necessity of a fair agreement.
Following China’s further restrictions on rare earth exports, Trump announced a 100% tariff increase on Chinese goods starting on November 1st, and also imposed restrictions on key software exports to China, escalating the tensions in the US-China trade relationship.
The economic and trade negotiations between the US and China held in Kuala Lumpur on Saturday and Sunday (October 26th) were the fifth face-to-face meeting between the two sides since May. The US delegation included Treasury Secretary Benson and Trade Representative Greil, while the Chinese side was represented by Vice Premier He Lifeng and senior trade negotiator Li Chenggang.
This crucial meeting was aimed at preparing for the upcoming Trump-Xi meeting. Greil, speaking to reporters in Kuala Lumpur, stated, “We are finalizing the details of the ultimate agreement so that both leaders can review and decide whether to complete this agreement together.”
The White House announced that Trump and Chinese leader Xi Jinping will meet in South Korea on October 30th, although Beijing has not publicly confirmed this arrangement.
Both sides do not expect any breakthroughs and thus the focus of the preparations for this meeting is on addressing differences and improving relations moderately. The US-China competition has become almost a norm in various aspects.
Below are six disputes in US-China trade issues based on reports from Reuters:
1. China significantly expanded the scope of rare earth export controls, adding five new elements, implementing additional reviews for semiconductor users, and imposing new regulations for foreign manufacturers using Chinese rare earth materials.
2. China’s weaponization of rare earths has prompted Western countries to take measures to reduce their dependence on China. China produces over 90% of global rare earths and rare earth magnets, which are crucial in various modern technology fields from smartphones to fighter jets.
3. During Australian Prime Minister Anthony Albanese’s visit to the US last week, Trump and Albanese signed a US-Australia agreement aimed at providing rare earths and critical minerals to the US.
4. The European Union is also considering all options to address the threat of Chinese rare earths and other critical minerals. The EU has announced a new EU resource plan, “RESourceEU,” to reduce its reliance on China for critical raw materials.
5. Treasury Secretary Benson stated after the US-China talks in Malaysia on Sunday that Beijing will delay the implementation of the expanded permit system by a year and will review this system.
6. US Trade Representative Greil, speaking on a Fox News program, mentioned that the US and China have agreed to suspend some punitive actions and have found a way forward where “we can get more rare earths from China, and we can try to balance our trade deficit by selling more in the US.”
However, Beijing has not discussed specific steps yet.
On Sunday, Benson stated that during the US-China trade war, China significantly reduced its purchases of US soybeans, almost to zero. Beijing has been pressuring Trump by leveraging American farmers. However, following the US-China trade negotiations, “I believe we have addressed the concerns of the farmers,” according to Benson.
He told NBC that Beijing will “buy a lot” of US soybeans based on the proposed trade agreement framework. Benson also highlighted that he himself is a soybean farmer, so he understands the farmers’ pain.
On October 14th, Trump stated on his social media platform “Truth Social” that China deliberately avoided buying US soybeans, causing difficulties for American farmers, which he deemed as economic hostility. In response, the US is considering terminating business dealings with China concerning edible oils and other trade elements.
China bought over half of the US soybean production in 2023 and 2024. The US exports to China peaked in 2022 at $17.92 billion.
In February of this year, the Trump administration imposed a 20% punitive tariff on Chinese imports due to Beijing’s failure to control the flow of precursor chemicals for fentanyl production into the US. Fentanyl has caused nearly 450,000 deaths in the US due to overdose.
Though the two sides reached a trade truce agreement in subsequent negotiations, the fentanyl tariffs remain in effect.
The issue of fentanyl was also discussed during the talks in Kuala Lumpur.
The US has levied port fees on ships operated, owned, or built by Chinese companies. Trump stated that this measure aims to revive the US shipbuilding industry.
In response, Beijing has imposed port fees on ships owned, operated, built, or flying the US flag, and has sanctioned five US-related subsidiary companies of the South Korean shipbuilding group Hanwha.
These measures from both sides have disrupted shipping flows and increased shipping costs.
Benson stated on Sunday that both sides have reached the “final agreement” on TikTok and that “all the details have been finalized.”
Previously, both the US and China announced a “framework agreement” to sell the majority ownership of TikTok to US investors, a result of last month’s trade negotiations in Madrid. Greil had mentioned at the time that the focus of the discussions was on TikTok to ensure an agreement that is fair to China and fully respects US national security concerns. However, this agreement has yet to be implemented.
Benson stated on Sunday that it is expected that Trump and Xi will “finalize” the agreement during the meeting, but it is not clear if any modifications have been made to the original framework.
During Sunday’s US-China talks, the two sides discussed extending the temporary suspension of US-China retaliatory tariffs. Currently, the overall tariff on Chinese imports into the US stands at 55%, with the suspension of retaliatory tariffs originally due to end on November 10th.
Trump previously announced a 100% tariff increase on Chinese goods starting from November 1st in response to China’s expansion of rare earth export restrictions. However, Benson mentioned on Sunday that this measure is “actually no longer under consideration” following this weekend’s talks.
“The President warned that if China imposes global restrictions on rare earth exports, he will impose a 100% tariff, giving me the biggest negotiation chip.” Benson stated, “It now appears that this threat has been averted, and the tariff measure has been avoided.”
According to Xinhua News Agency, Chinese Vice Premier He Lifeng stated that the two sides conducted constructive discussions on the US-China maritime logistics and shipbuilding industry under the 301 measures, extending the temporary suspension of retaliatory tariffs, fentanyl tariffs, law enforcement cooperation, agricultural trade, export controls, etc., “reaching a basic consensus.” Both sides agreed to further clarify specific details and go through their respective domestic approval processes.
Compared to the information disclosed by Benson to US media during the talks, the amount of information reported by the Chinese side is less extensive.
The US is formulating new measures targeting China, including imposing tariffs on software-driven export products and implementing broad industry tariffs on semiconductors, pharmaceuticals, and other key industries.
The Trump administration also initiated a new tariff investigation last Friday to determine whether China has “clearly failed” to comply with the “Phase One” US-China trade agreement signed during Trump’s first term in 2020.