KUALA LUMPUR, Malaysia (AP) — A trade agreement between the United States and China is reportedly drawing closer, with officials from both sides saying Sunday that they had reached an initial consensus for President Donald Trump and Chinese leader Xi Jinping to finalize during their upcoming high-stakes meeting.
Any potential deal would bring relief to global markets, though it may not fully address deep-rooted issues such as manufacturing imbalances and restrictions on access to advanced computer chips.
Beijing has recently limited exports of rare earth elements, which are essential for high-tech industries, prompting Trump to threaten additional tariffs on Chinese goods.
The escalating tension had raised fears of a broader trade conflict that could slow global economic growth.
China’s top trade negotiator Li Chenggang said both sides had reached a “preliminary consensus,” while US Treasury Secretary Scott Bessent described the discussions as having a “very successful framework.”
Trump, expressing optimism, said, “They want to make a deal, and we want to make a deal.” He is scheduled to meet Xi in South Korea on Thursday, the final stop of his Asian tour.
Bessent said that the threat of new tariffs against China was “effectively off the table.”
He added that initial agreements include curbing the export of fentanyl precursor chemicals to the US, substantial Chinese purchases of soybeans and other agricultural goods, and a suspension of rare earth export controls.
US Trade Representative Jamieson Greer said the final outcome “will depend” on the discussions between Trump and Xi.
Trump also suggested that he could visit China in the future, while Xi might travel to Washington or Mar-a-Lago, Trump’s private Florida residence.
The progress came on the sidelines of the Association of Southeast Asian Nations (ASEAN) summit in Kuala Lumpur, where Trump sought to highlight his reputation as an international dealmaker.
TRUMP ATTENDS CEASEFIRE CEREMONY BETWEEN THAILAND AND CAMBODIA
During the summit, Thailand and Cambodia signed an expanded ceasefire agreement witnessed by Trump.
Earlier this year, his threats of economic sanctions reportedly pressured the two nations to end border skirmishes that had displaced thousands.
Under the agreement, Thailand will release Cambodian prisoners, and Cambodia will withdraw heavy artillery from the frontier. Regional observers will monitor the truce.
“We did something that a lot of people said couldn’t be done,” Trump said. Cambodian Prime Minister Hun Manet hailed it as a “historic day,” while Thai Prime Minister Anutin Charnvirakul called it a “foundation for lasting peace.”
Trump also signed new economic frameworks with Cambodia, Thailand, and Malaysia, aimed at enhancing trade in critical minerals as Washington seeks to reduce reliance on Chinese supply chains.
“It’s very important that we cooperate as partners to ensure secure and stable supply chains,” Greer said.
REENGAGING WITH SOUTHEAST ASIA
Trump’s appearance marked a renewed effort to engage with the ASEAN bloc, an economic region of 680 million people and a combined GDP of $3.8 trillion.
“The United States is with you 100%, and we intend to be a strong partner and friend for many generations to come,” Trump said, praising his counterparts as “spectacular leaders.”
His tariff threats were also credited with motivating peace talks between Thailand and Cambodia, whose brief but deadly border conflict in July killed dozens and displaced hundreds of thousands.
OTHER HIGHLIGHTS: BRAZIL AND CANADA
On the sidelines of the summit, Trump met with Brazilian President Luiz Inácio Lula da Silva, signaling a thaw in relations despite tensions over the prosecution of former president Jair Bolsonaro, a Trump ally.
Trump suggested he could reduce tariffs on Brazil in exchange for “leniency” toward Bolsonaro.
However, Trump avoided Canadian Prime Minister Mark Carney, expressing anger over a Canadian television ad criticizing his trade policies.
En route to the summit, Trump announced plans to raise tariffs on Canada.
Absent from the event was Indian Prime Minister Narendra Modi, whose relationship with Trump has cooled.
Trump’s past comments about mediating India’s conflict with Pakistan and his decision to raise tariffs on India over Russian oil imports have strained ties.