Trade tensions between the United States and China appeared to cool on Sunday ahead of a meeting between President Donald Trump and Chinese leader Xi Jinping, with the Chinese government suggesting that a mutual understanding had been reached between the world’s two largest economies. The talks followed China’s placing limits on the exporting of rare earth elements needed for advanced technologies and Trump’s threat of an additional 100 per cent tariffs on Chinese goods. The conflict has been poised to weaken economic growth worldwide.
China’s top trade negotiator, Li Chenggang, told reporters that the two sides had reached a “preliminary consensus” on areas of dispute and would seek to further stabilise the relationship. Trump also expressed confidence that an agreement was at hand. “They want to make a deal and we want to make a deal,” he said. Trump reiterated his plan to visit China in the future and suggested that Xi could come to Washington or Mar-a-Lago, his private club in Florida.
The announcement came at the annual summit of the Association of Southeast Asian Nations, hosted in Kuala Lumpur, with Trump seeking to burnish his reputation as an international dealmaker. Yet the path to those deals has involved serious disruptions at home and abroad, with his tariff hikes scrambling the global economy and a US government shutdown that has him feuding with Democrats.
Tariffs are in focus on Trump’s trip: Trump sat down with Brazilian President Luiz Inácio Lula da Silva in Kuala Lumpur, who was also attending the summit. There has been friction between the two leaders over the Brazilian prosecution of Jair Bolsonaro, the country’s former president, who has been close to Trump. Bolsonaro was convicted of attempting a coup in his country earlier this week.
During his meeting with Lula on Sunday, Trump said he could reduce tariffs on Brazil that he enacted in a push for leniency for Bolsonaro. “I think we should be able to make some good deals for both countries,” he said. While Trump was warming to Lula, he avoided Canadian Prime Minister Mark Carney. The president is angry with Canada because of a television advertisement protesting his trade policies, and on his way to the summit, he announced on social media he would hike tariffs on Canada because of it.
Trump has expressed confidence about reaching deals during the rest of his trip, including with China. Fentanyl trafficking and soybean sales are among Trump’s priorities. “I think we have a really good chance of making a very comprehensive deal,” Trump said. It remains to be seen whether Trump’s dealmaking addresses longstanding issues or puts them off for another day.
US Treasury Secretary Scott Bessent suggested Sunday that Washington and Beijing could step back from their confrontation instead of pushing forward with higher tariffs by America and export restrictions on rare earth elements by China. When asked if the two countries could extend the trade truce from earlier this year, Bessent said: “I would say yes.” However, he emphasised that the final decision would be up to Trump.
One leader who was absent from the summit in Kuala Lumpur is Indian Prime Minister Narendra Modi. Although he was close with Trump during his first term, the relationship has been more tense lately. Trump caused irritation by boasting that he settled a recent conflict between India and Pakistan, and he has increased tariffs on India for its purchase of Russian oil.
