US-China Trade Agreement Nears Ahead of Trump-Xi Meet

According to reports, the U.S. and China have come to an agreement on a number of significant issues ahead of the highly anticipated meeting between former U.S. President Donald Trump and Chinese President Xi Jinping later this week, which could lead to a decrease in trade tensions between the countries with the largest economies.

US Treasury Secretary Scott Bessent stated that a new trade agreement, or a trade agreement generally, is possible since Washington and Beijing have reached “significant progress,” and that there seems to be no more threat from Trump to enact 100% tariffs on Chinese goods.

“We had a very good two-day meeting,” said Bessent during an interview with CBS News. “The threat of a [100%] tariff increase has evaporated, along with the concern that China will start a worldwide export control regime.”

The discussions, which were said to be constructive by both parties, touched on various sensitive subjects — including export controls, fentanyl governance and shipping costs, according to a Bloomberg report citing a senior Chinese official. The official stated that both delegations came to an “initial consensus,” a significant improvement of the tone after weeks of aggressive rhetoric.

The thaw follows a tumultuous spell in U.S.-China relations. Earlier this month, Beijing announced new export restrictions on rare earth materials, which are essential components for defense, electronics, and renewable energy systems. In reaction, Trump threatened extensive tariffs that could have sparked an all-out trade war. The latest development, however, suggests all parties are looking to normalize trade relations with respect to global market volatility, according to Bessent. She said the Trump-Xi meeting is anticipated to extend the existing tariffs truce, and possibly resolve individual contentious issues including the future of TikTok in the U.S. and the supply of rare earth magnets.

Experts say the renewed collaboration may provide a much-needed shot of confidence in the markets to stabilize global trade. In addition, it signals that we may be entering a more pragmatic phase in the US-China economic diplomacy, as they both seem inclined to reformulate confrontational competition with conversations.

The Trump-Xi meeting, which is expected to happen later this week, will likely determine the path of bilateral trade relations going into next year — with the world watching for reassuring signs of a long-awaited breakthrough.