A Fragile Deal to Avoid Economic Shock
A high-stakes trade standoff between the United States and China eased Sunday after both nations agreed to a preliminary framework that could avert sweeping tariffs and rare earth export controls.
In Kuala Lumpur, US Treasury Secretary Scott Bessent announced a “very substantial framework” following talks with Chinese Vice Premier He Lifeng. The agreement was reached on the sidelines of the ASEAN Summit.
Tariffs Deferred, Exports Preserved
The deal aims to prevent President Trump’s threatened 100 percent tariffs on Chinese imports and China’s proposed restrictions on rare earth exports. These minerals are essential to the production of smartphones, electric vehicles, and defense systems.
“The president gave me maximum leverage,” Bessent told NBC’s Meet the Press. “We’ve deferred the export controls and avoided the tariffs—for now.”
Key Terms of the Framework
The agreement includes commitments to expand Chinese purchases of US soybeans and agricultural goods. It also outlines cooperation on fentanyl interdiction, a priority for the Trump administration.
President Trump is expected to meet Chinese President Xi Jinping later this week in South Korea to finalize the deal. “I think we have a successful framework for the leaders to discuss,” Bessent added.
Strategic Minerals and Global Supply Chains
Rare earth minerals are critical to global technology supply chains. China currently controls over 70 percent of their production. A disruption could cripple industries across the globe.
Analysts caution that the framework is not a binding treaty. “It’s a pause, not a resolution,” said trade strategist Mei Lin. “The real test will be enforcement and transparency.”
A Shift in Tone, But Not in Risk
The agreement signals a shift from confrontation to containment. However, with Trump’s tariff deadline set for November 1, the window for a permanent resolution remains narrow.
