On Sunday, October 26, the US-China economic and trade team concluded a two-day trade negotiation in Malaysia. The US Treasury Secretary Mnuchin stated that Beijing will delay the implementation of rare earth export controls and will purchase a large amount of American soybeans. However, the framework agreement reached by the US-China team still needs to be finalized by the leaders of both countries during the Xi-Trump meeting in South Korea.
The White House announced that President Trump and President Xi Jinping will meet in South Korea on October 30. Mnuchin, who participated in the US-China trade negotiations, gave interviews to several American media outlets on Sunday to introduce the outcomes of the negotiations. He mentioned that his meetings with Chinese Vice Premier He Leifeng over the past two days were to prepare for the Xi-Trump meeting and ensure its success.
In an interview with ABC’s “This Week,” Mnuchin stated that the US-China team reached a consensus, with China agreeing to purchase a large amount of American agricultural products.
Mnuchin also expressed his belief that China will “delay by a year” the implementation of rare earth restrictions and, at the same time, will review this measure.
US Trade Representative Lighthizer, who participated in the US-China negotiations, stated in an interview with Fox News that both sides agreed to suspend some punitive actions and found “a path forward where we can get more rare earths from China, we can try to balance our trade deficit through sales from the US.”
Mnuchin pointed out that during the US-China trade war, China significantly reduced its purchases of American soybeans, almost down to zero. Beijing has been using American farmers to pressure Trump. However, after the US-China trade negotiations, “I think we have resolved the farmers’ concerns. I don’t want to speak ahead of the President, but I believe when the agreement with China is announced, our soybean farmers will be very satisfied with this harvest season and the seasons to come.”
In an interview with NBC’s “Meet the Press,” Mnuchin mentioned that Trump is likely to visit Beijing early next year, before the Chinese New Year on February 17. He also stated that the G20 summit will be held in the US next fall, and Xi Jinping may meet with Trump in Washington before attending the summit.
The issues of American soybeans and rare earths are the two main concerns for President Trump. On October 14, Trump stated on his social media platform “Truth Social” that China deliberately does not purchase American soybeans, causing difficulties for American soybean farmers, which he views as an act of economic hostility. In response, the US is considering halting business dealings with China in edible oils and other trade elements.
On October 9, China announced an expansion of export controls on rare earth products. Trump retaliated on October 10, condemning China for strangling the market and stated that if the US and China do not reach an agreement, the US will impose a 100% tariff on Chinese products starting from November 1. He also mentioned that the US is considering imposing export restrictions on key software. Mnuchin stated on Sunday that Trump’s warnings provided leverage for the US team in negotiations with China. The two sides reached a framework trade agreement that includes the purchase of American soybeans and the delay in rare earth export controls.