US and China agree framework of trade deal ahead of Trump-Xi meeting

The United States and China have agreed on the framework of a potential trade agreement that will be discussed when their leaders meet later this week, the US Treasury Secretary said.

Scott Bessent told the BBC's US news partner CBS that this included a “final deal” for TikTok's US operations and a delay in tightening controls on rare earth minerals in China.

He also said he does not expect the 100 percent tariff on Chinese goods threatened by US President Donald Trump to take effect while China resumes significant purchases of US soybeans.

Both countries are keen to avoid further escalation of the trade war between the world's two largest economies.

Trump and Chinese President Xi Jinping are scheduled to hold talks on Thursday in South Korea.

Bessent met with senior Chinese trade officials on the sidelines of the Association of Southeast Asian Nations (ASEAN) summit in Malaysia, which Trump is also attending as part of his Asia tour. Beijing said they had “constructive” discussions.

Bessent said the countries had “reached a significant framework for the two leaders,” adding: “Tariffs will be eliminated.”

The Chinese government said in a statement that both negotiating teams “reached basic consensus on measures to resolve their issues.”

“Both sides agreed to further clarify specific details,” they added.

Since Trump re-entered the White House, he has imposed and threatened high tariffs on foreign imports in various countries, arguing that the policies will help boost U.S. manufacturing and jobs. The introduction of tariffs led many countries, including the UK, to enter into new agreements with the US.

But the highest taxes he threatened were imposed on China. Beijing hit back with measures of its own, although it agreed to delay imposing tariffs while it hammers out a trade deal.

However, earlier this month, Trump said he from November will introduce an additional 100% tariff on Chinese goods. in response to China's tightening restrictions on the export of rare earth metals, materials needed to make many types of electronics. The US president accused Beijing of “becoming very hostile” and trying to hold the world “captive”.

China processes about 90% of the world's rare earth metals, which are used in everything from solar panels to smartphones, making their supply to American manufacturers a key bargaining chip.

The last time Beijing tightened export controls – after Trump raised tariffs on Chinese goods earlier this year – there was an outcry from many US firms dependent on those materials.

China will “put it on hold for a year while they reconsider it,” Bessent said on Sunday's episode of fellow news program This Week.

Another controversial issue is soybeans, of which China is the world's largest buyer. As the trade war began to heat up, China has suspended all ordersharming US farmers.

Bessent hinted that the boycott might end soon, but declined to give details.

“I actually grow soybeans, so I felt that pain too… I think we've solved the farmers' problems,” he said on “This Week.”

“I believe that when the announcement of the deal with China is made public, our soybean farmers will be very pleased with what is happening in this and upcoming seasons for several years.”

Bessent also said a deal had been agreed upon for the U.S. unit of video-sharing platform TikTok, leaving Trump and Xi “to finalize that deal on Thursday.”

The US tried to take over the app's US operations from Chinese parent company ByteDance over national security concerns.

TikTok had previously been told it would have to sell its US operations or risk being shut down, but Trump delayed the ban four times to facilitate negotiations and again extended the deadline to December.

Last month, the White House announced that US companies would control TikTok's algorithm and Americans would hold six of the seven board seats for the app's US operations.

Although Trump initially called for a ban on TikTok during his first term, he has since changed course. He turned to the wildly popular platform to rally support among young Americans during his successful 2024 presidential campaign.

On Sunday, Washington also announced that trade agreements with Malaysia and Cambodia had been concluded and frameworks agreed with Thailand and Vietnam.