US and China Reach Preliminary Trade Consensus Ahead of Trump-Xi Meeting

Preliminary Consensus Reached in Malaysia

Officials from the United States and China announced on Sunday, October 26, 2025, that they have reached a preliminary consensus on a trade deal. This breakthrough follows two days of intensive talks held in Kuala Lumpur, Malaysia, on the sidelines of the ASEAN Summit. The agreement aims to ease escalating trade tensions between the world's two largest economies and sets the stage for a high-stakes meeting between US President Donald Trump and Chinese President Xi Jinping later this week in South Korea.

Key Elements of the Agreement

The preliminary consensus addresses several contentious points that have fueled the ongoing trade dispute. A significant outcome is the effective removal of the threat of President Trump's 100% tariffs on Chinese imports, which were scheduled to take effect on November 1. Additionally, China has committed to delaying its new licensing regime for exports of rare earth minerals and magnets for a year, pending a policy review. This move is seen as a major concession, providing stability to global supply chains reliant on these critical materials.

Furthermore, the agreement includes a commitment from Beijing to make substantial additional purchases of US goods and services, particularly focusing on soybeans and other agricultural products. This is expected to provide significant relief to American farmers. The current tariff truce between the two nations is also anticipated to be extended beyond its November 10 expiry date.

Addressing Broader Trade Issues

Beyond tariffs and agricultural goods, the preliminary deal touches upon other critical areas. Officials reported initial agreements to curb the flow of precursor chemicals for fentanyl into the United States. Discussions also included resolving differences over the sale of TikTok in the US, indicating a broader scope for de-escalation. US Treasury Secretary Scott Bessent stated that the US would not change its export controls directed at China.

Official Statements and Future Outlook

Chinese top trade negotiator Li Chenggang confirmed that both sides had reached a 'preliminary consensus' and would now proceed with their respective internal approval processes. US Treasury Secretary Scott Bessent described the outcome as a 'very successful framework' for the leaders to discuss. President Trump expressed confidence, stating, 'They want to make a deal, and we want to make a deal.' The upcoming meeting between President Trump and President Xi Jinping in South Korea is expected to finalize the terms of this framework, marking a significant step towards stabilizing the volatile trade relationship that began in 2018.