U.S. and China Strike Framework Deal Before Trump-Xi Summit

​Breakthrough in Trade Talks
After weeks of escalating tariffs and tense rhetoric, the United States and China have reached a framework trade agreement, signaling a major thaw ahead of the high-stakes Trump-Xi meeting later this week. The breakthrough, confirmed by Treasury Secretary Scott Bessent, averts the 157% tariff President Trump had threatened on Chinese imports and sets the stage for deeper negotiations.

The progress came during the first leg of Trump’s Asia diplomacy tour, which began in Malaysia over the weekend. “We’ve reached a substantial framework for the two leaders who will meet next Thursday,” Bessent told reporters, adding that the most punitive tariffs were now “effectively off the table.”

Signs of Compromise
Talks held in Kuala Lumpur brought a series of unexpected compromises. China agreed to expand purchases of U.S. soybeans — a key export for Midwest farmers hit hard by the trade war — and both sides pledged stronger cooperation to curb the flow of fentanyl precursors into the U.S.

Perhaps most notably, Bessent revealed that negotiators finalized a “deal on TikTok,” allowing its U.S. assets to be sold to American investors in compliance with national security rules. “All the details are ironed out,” he said. “It’s now up to the two leaders to consummate the transaction.”

China’s state media later confirmed that both delegations had reached a “preliminary consensus” addressing trade, drug enforcement, and export restrictions. Beijing’s lead negotiator Li Chenggang said the sides had “engaged in deep conversations” to smooth tensions over U.S. port charges, technology access, and rare earth exports.

Rare Earths, Tech, and the Bigger Picture
The talks also appear to have defused one of the most contentious disputes — China’s control over rare earth minerals, critical for electronics and defense production. The U.S. reportedly secured a deferral on new Chinese export controls, which had threatened to tighten global supply chains.

Trump’s team hopes the new framework will allow him and President Xi Jinping to finalize a more comprehensive trade deal during their scheduled meeting in South Korea on the sidelines of the APEC CEO Summit. While Beijing has yet to officially confirm the sit-down, that’s standard practice for China until meetings are underway.

Still, officials from both sides cautioned that the deal is far from done. “Both sides agreed to finalize the details and complete their domestic approval processes,” China’s readout said, stressing that recent “shocks and fluctuations” were “not what China wanted to see.”

Markets React and Expectations Rise
Global markets cheered the breakthrough. Asian stocks rallied, and U.S. futures ticked higher as investors welcomed signs of easing trade tension between the world’s two largest economies. Economists say that even a temporary pause in tariff escalation could help stabilize supply chains and boost business confidence.

​The framework may not resolve every dispute, but it marks a turning point after months of tariff battles and diplomatic strain. With the Trump-Xi summit just days away, investors, manufacturers, and farmers alike are hoping this fragile peace can hold.