The United States and China have reached a “very substantial framework” to pull back from the brink of a fresh tariff war, U.S. Treasury Secretary Scott Bessent announced on Sunday, after two days of high-level talks in Kuala Lumpur, Malaysia. Under the preliminary deal, Washington will hold off on its threatened 100 percent tariffs on Chinese goods, while Beijing will defer its expanded export controls on rare earth minerals and resume large-scale purchases of American soybeans.
The announcement, made on NBC’s “Meet the Press,” capped a weekend of intense diplomacy on the sidelines of the ASEAN summit — and set the stage for a face-to-face meeting between President Donald Trump and Chinese President Xi Jinping in South Korea next week, where the final terms are expected to be decided.
How We Got Here
The breakthrough follows weeks of escalating tension between the world’s two largest economies. Earlier this month, Trump threatened to slap new triple-digit tariffs on Chinese imports starting November 1, a response to Beijing’s expanded controls on rare earth magnets and minerals — materials critical to everything from electric vehicles to advanced weapons systems.
The two countries had been operating under a trade truce signed in May that rolled back most of their tit-for-tat tariffs. That truce is due to expire on November 10. Bessent said the ceasefire on tariffs could be extended, with the final decision resting with the president.
Trump arrived in Malaysia on Sunday for the ASEAN summit, expressing confidence that a deal was within reach as his negotiators sat down with their Chinese counterparts.
The Kuala Lumpur Breakthrough
The talks paired Bessent and U.S. Trade Representative Jamieson Greer against China’s Vice Premier He Lifeng and top trade negotiator Li Chenggang, with discussions unfolding over two days in the Malaysian capital.
Speaking to NBC on Sunday, Bessent struck an upbeat note: “No, I’m not [anticipating the 100% tariffs], and I’m also anticipating that we will get some kind of a deferral on the rare earth export controls that the Chinese had discussed.”
On the Chinese side, Li Chenggang described the discussions as “in-depth” and “candid,” while acknowledging the hard bargaining involved: “the US has a tough stand, and China is firm in safeguarding our own interest.”
What’s In the Deal
According to the announcements from both delegations, the preliminary framework covers five main pillars:
First, the United States will not impose the additional 100 percent tariffs on Chinese goods that were scheduled to take effect on November 1. Second, China will defer its expanded licensing regime for rare earth exports — multiple accounts report the delay as one year — removing the immediate threat to global high-tech supply chains.
Third, Beijing agreed to large-scale purchases of American soybeans and other agricultural products, a major win for U.S. farmers who have been battered by the trade standoff. Fourth, the framework sets up discussions on more balanced U.S.-China trade and measures to address the flow of fentanyl into the United States.
Fifth, the agenda includes two thornier items: the future ownership of the Chinese-owned social media platform TikTok, and a U.S. review of relaxing certain export controls and adjusting port fees imposed on Chinese shipping. Beijing, for its part, said the preliminary consensus also touches on tariff suspension and Washington’s measures targeting shipbuilding and maritime trade.
Markets reacted quickly to the news. Bitcoin jumped roughly 2 percent on Sunday as the immediate threat of a renewed tariff war receded, and U.S. stock futures opened higher on Monday, with investors also buoyed by hopes of easing tensions with Iran.
What This Means
If it holds, the framework would defuse the most dangerous trade confrontation of the year before it detonates. A 100 percent tariff on Chinese goods, set to land just days before the November 3 midterm elections, would have rattled American consumers and businesses already dealing with elevated prices and borrowing costs.
For American agriculture, the soybean commitment is the most tangible prize. China is the world’s largest soybean importer, and its purchases were a cornerstone of the earlier phase-one trade deal. Restoring that demand could provide real relief to farm states heading into the midterms.
The rare earths piece may matter even more in the long run. China’s dominance of rare earth processing gives it enormous leverage over the global technology industry, and its export-control expansion was seen in Washington as a direct pressure tactic. A one-year deferral buys both sides time — but it does not resolve the underlying vulnerability.
Analysts also caution that this is a framework, not a signed deal. The May truce showed how quickly understandings between Washington and Beijing can fray, and the final terms will depend entirely on what Trump and Xi agree when they meet.
What Happens Next
All eyes now turn to South Korea, where Trump and Xi are expected to meet on the sidelines of the APEC summit in Gyeongju (October 31 to November 1). Bessent made clear that the leaders themselves will decide the final terms.
Three dates will shape what follows: the November 1 deadline for the threatened tariffs, now effectively paused; the November 10 expiry of the May trade truce, which could be extended; and the Trump-Xi meeting itself, which will determine whether Sunday’s framework becomes a durable agreement or another diplomatic false dawn.
For now, according to reports, the nightmare scenario of a renewed tariff war is receding — and the world’s two largest economies have bought themselves one more chance at a deal.
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