US and China Reach Preliminary Trade Deal in Kuala Lumpur Ahead of Trump-Xi Summit

After two days of negotiations in Kuala Lumpur, US Treasury Scott Bessent and Chinese Vice Premier HE Lifeng have reached a trade deal ahead of a potential summit between Presidents Trump and Xi on the sidelines of the APEC Summit 2025. In view of the Summit, US Treasury Secretary Scott Bessent and Chinese Trade Envoy LI Chenggang declared that both sides would need submit the deal to their respective Presidents for approval.

According to the declarations by Bessent, he appeared optimistic regarding China relaxing its exports control on #RareEarths. In addition, he believes that China will resume purchases of American #soybeans. No further #tariffs on Chinese goods is expected to come into play by the looming deadline on the 1st of November 2025.

“The talks have been comprehensive and constructive. We have reached a basic framework that sets the stage for a productive meeting betwen Presidents Trump and Xi on Thursday [30 Nov 2025]. “

US Treasury Secretary Scott Bessent

China is going to cut down its imports of Russian oil and work with the USA in the fight against illicit drugs by stemming the flow of #Fentanyl. It is projected that both sides would ratchet down the extra fees imposed on each other’s ships as well. The #TikTok deal reached earlier is expected to sail through, subject to regulatory approval on both sides.

After contributing to broker a peace deal between Cambodia and Thailand, US President Trump did not lose any time to seal deals with Cambodia, Thailand, and Malaysia which involved #CriticalMinerals, including #RareEarths, on the sidelines of the ASEAN Summit 2025. Malaysia has an estimated 16 million tonnes of Rare Earth Elements (#REE) deposits and has recently banned the export of raw ore in a bid to bolster local value addition (#LVA).

“The US has been tough, while China has been firm. A preliminary consensus has been reached, subject to approval based on respective internal procedures.“

China Trade Envoy LI Chenggang

For China, it was important to reduce the custom tariffs which has drastically driven down Chinese exports to the US. The US even closed down loopholes as China used third-party countries such as Mexico to circumvent tariffs. Similarly, China would only supply REE products to countries, on the condition that they are not re-exported to the US. Taiwan remains ‘a core issue’ for China, while Trump wants to end to the Ukraine-Russia conflict.

In addition to tariffs, Trump also banned exports of Boeing parts to China and threatened a ban on mission-critical software to China. During the recent 4th Plenum, China introduced its 15th Five-Year Plan which put emphasis on innovation so that the country can become self-reliant in critical technologies.

Following the 5th round of US-China negotiations, the trade tensions have de-escalated and there are positive signs that both sides may reach a deal. Gold prices dropped upon the announcement as confidence in the United States Dollar started to return. President Trump left Kuala Lumpur on 27 Octover 2025 for Tokyo, and will then travel to Seoul to join President Xi at the APEC Summit.