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Deal to pause U.S.-China trade war appears likely ahead of APEC

Published: 27 Oct. 2025, 17:43 Updated: 27 Oct. 2025, 19:42

U.S. President Donald Trump, left, meets with China's President Xi Jinping at the start of their bilateral meeting at the G20 leaders summit in Osaka, Japan on June 29, 2019. [REUTERS/YONHAP]

A deal to pause the U.S.-China trade war appears increasingly likely ahead of Thursday’s summit in Korea, following what officials described as major progress during high-level talks over the weekend in Kuala Lumpur, Malaysia.

Both sides tentatively agreed that China would delay its planned rare earth export controls for one year, and that the United States would withdraw its 100 percent tariff hikes scheduled to take effect on Saturday.

U.S. Treasury Secretary Scott Bessent said in separate interviews with U.S. media outlets on Sunday that trade negotiations with China have been productive.

“I believe that we have the framework for the two leaders to have a very productive meeting for both sides,” Bessent told NBC when asked if China was prepared to make a deal.

U.S. President Donald Trump and Chinese President Xi Jinping are set to meet in Korea on Thursday.

When asked if the United States would still impose the 100 percent tariffs on Chinese products that Trump previously threatened, Bessent replied, “No [...] 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.”

'Could be a fantastic meeting'

U.S. Treasury Secretary Scott Bessent looks on as he speaks to the media, following trade talks between the United States and China, in Kuala Lumpur, Malaysia on Oct. 26. [REUTERS/YONHAP]

Though Bessent said that final conditions depend on the two leaders’ meeting, he appeared optimistic.

“Based on this substantial framework from the past two days, I think that this could be a fantastic meeting between the two leaders [...] I think that we have managed to pregame a lot of that in advance here in Kuala Lumpur,” he told ABC.

He added that China had agreed to suspend the rare earth export permit system for one year and review it later.

The secretary also said that discussions initially planned to extend the mutual suspension of high tariffs before Nov. 10, when the current agreement expires, may no longer be necessary.

Since the second Trump administration began, the two countries have gradually reduced tariffs that once surged to as high as 145 percent on Chinese imports and 125 percent on U.S. goods. They agreed in May to lower them by 115 percentage points for 90 days and in August to extend that reduction for another 90 days.

Bessent’s comments indicate that both sides reached a provisional agreement in Kuala Lumpur to extend the arrangement again.

China reports 'constructive' talks

U.S. President Donald Trump, right, chats with Chinese President Xi Jinping during a welcome ceremony at the Great Hall of the People in Beijing on Nov. 9, 2017. [AP/YONHAP]

China’s state-run Xinhua News Agency reported on Sunday that the two sides held “in-depth and constructive exchanges of views on important trade and economic issues of mutual concerns,” including Washington’s Section 301 measures against Chinese shipping and shipbuilding, the extension of mutual tariff suspensions, as well as cooperation on fentanyl control, agricultural trade and export restrictions. The report said they reached “basic consensuses” on plans to address each other’s concerns.

The U.S. delegation, led by Bessent and U.S. Trade Rep. Jamieson Greer, met with Chinese Vice Premier He Lifeng and Vice Minister of Commerce Li Chenggang.

Washington reportedly urged Beijing to ease rare earth export restrictions, strengthen enforcement against fentanyl production and trafficking and resume imports of U.S. soybeans. Beijing, for its part, pressed for the removal of high tariffs, relaxation of export controls on advanced technologies and core software and reaffirmation of its “One China” principle.

Beijing expected to resume U.S. soybean imports

Regarding soybean imports, Bessent told CBS, “I'm not going to give you the details here, but I can tell you that the soybean farmers are going to be extremely happy with this deal for this year and for the coming years.” His remarks suggest that Beijing is set to lift its ban on U.S. soybean imports.

The final decision will be made when Trump and Xi meet on Thursday. Given the conciliatory tone from both governments, analysts expect a substantial agreement. On Friday, while en route to Asia, Trump told reporters aboard Air Force One that China will “have to make concessions. I guess we will too.”

Analysts say both sides have a strong incentive to de-escalate. The costs of implementing such extreme measures — a 100 percent U.S. tariff and China’s rare earth export curbs — would be immense and unsustainable.

After his visit to Malaysia, Trump is set to spend two nights in Japan before making a state visit to Korea on Wednesday. Xi will arrive the next day to attend the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju. Their meeting on Thursday will mark the first summit since Trump began his second term.

The United States may raise pressure on Korea

U.S. President Donald Trump, left, greets President Lee Jae Myung upon his arrival at the White House on Aug. 25 in Washington. [AP/YONHAP]

With the U.S.-China trade dispute easing rapidly ahead of the summit, attention is turning to how this might affect the United States' ongoing trade negotiations with Korea.

Washington and Seoul have yet to finalize an agreement on Korea's promised $350 billion investment in U.S. industries. Although the two sides have narrowed their differences, they remain stuck on the details. Analysts warn that if the United States clears its biggest hurdle with China, it may ramp up pressure on Korea to make concessions.

“The method of investment, the amount of investment, the timeline and how we will share the losses and divide the dividends — all of these remain sticking points,” President Lee Jae Myung said in a Bloomberg interview published on Sunday. His remarks contrast with Trump’s comment on Friday that a deal with Korea was “very close.”

Both sides reportedly agreed to limit Korea’s direct investment to around $200 billion to avoid excessive market disruptions. However, Washington is pushing for $250 billion in investments spread over eight years, while Seoul is proposing less than $200 billion over a period of more than 10 years. The two governments are also still negotiating control over investment targets and how to divide profits.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM HYOUNG-GU [[email protected]]