China-US Trade Deal to Be Consummated at Trump-Xi Meeting: Sources
Oct. 26—Sources close to the White House confirm that a major trade deal between China and the United States, ending the roiling trade war between the world's two largest economies, is likely to be reached at the upcoming meeting between President Donald Trump and Chinese President Xi Jinping in South Korea later this week.
The sources report that the consensus for a framework for the trade deal was reached between negotiators for the two sides, with the details to be further worked out during the meeting between the two Presidents.
China’s top trade negotiator, Li Chenggang, told reporters that the two sides had reached a “preliminary consensus,” while Trump's Treasury Secretary, Scott Bessent, said there was “a very successful framework.”
Tariffs and Agricultural Trade Concessions
Bessent told CBS’ “Face the Nation” that the threat of additional higher tariffs on China was “effectively off the table.” In interviews on several American news shows, he said discussions with China yielded initial agreements to stop the precursor chemicals for fentanyl from coming into the U.S., and that Beijing would make “substantial” purchases of soybean and other agricultural products while putting off export controls on rare earths. Trump had announced new 100% tariffs on Chinese imports to go into effect Nov. 1, on top of 55% tariffs already in effect. His announcement had sent international markets tumbling.
“It would be an extra 100% from where we are now, and I believe that that is effectively off the table,” Bessent said. “I’m not going to get ahead of the two leaders who will be meeting in Korea on Thursday, but I can tell you we had a very good two days. So, I would expect that the threat of the 100% has gone away, as has the threat of the immediate imposition of the Chinese initiating a worldwide export control regime.”
The Treasury Secretary also teased that “soybean farmers are going to be extremely happy with this deal for this year and for the coming years,” without elaborating. China had cancelled soybean purchases from the U.S. as its response to the tariffs.
Presidential Optimism and Future Engagements
Trump also expressed his confidence that an agreement was at hand, saying the Chinese "want to make a deal and we want to make a deal.” Trump, who is now confirmed to meet with Xi Oct. 30 on the sidelines of the APEC summit in South Korea, reiterated that he also plans to visit China in the future and suggested that Xi could come to Washington or Mar-a-Lago, Trump's private club in Florida.
Bessent repeated in interviews that the threat of additional higher tariffs on China was “effectively off the table.” He also confirmed agreements to stop fentanyl precursor chemicals from entering the U.S., and to resume Chinese purchases of U.S. agricultural products.
Xi’s Broader Economic Vision
Sources have reported for months that Xi plans to make a much broader offer to Trump and the U.S. that would involve opening up China for U.S. investment and for China to invest in cooperative infrastructure and energy projects in the United States and other parts of the world. These sources say that Xi envisions the U.S. cooperating with China on economic development projects around the world. In the past, under the Biden Administration and in response to Sinophobes in the State Department and in the military, the U.S. has sought to block such projects, claiming China wanted to compete with the U.S. for strategic influence. Xi wants to carefully explain to Trump, the dealmaker in chief, the great benefits that the U.S. economy could derive from such cooperative development projects. These sources say that Xi could propose to establish a joint bank for international development, to help create credit to fund such development projects.
Xi, these sources say, will explain that even when China ran a surplus in its trade with the U.S., it attempted to blow much of that surplus back into the U.S. through the purchase of more than a trillion dollars in U.S. treasuries and other government securities to help the U.S. fund its deficits. At present, China has suspended such purchases and has threatened to sell off U.S. debt it holds. Xi, these sources report, could offer for China to renew such purchases.
Peace in Ukraine and Pushback from Neo-Cons
Trump has said that he will request China's help in securing a fair peace settlement to end the war in Ukraine. Xi is expected to offer whatever help is desired.
"Trump's desire to have friendly relations with China is sending some of the neo-cons that infest his Administration into a frenzy," said a source. "They would prefer to mobilize for a confrontation and possible war. Xi thinks that Trump wants to go down a different path, and he will offer him all the encouragement he can to seek peace and development."
TikTok Deal Finalized Amid Broader Talks
Another problem expected to be dealt with during this week's talks is the finalizing of the sale of the American version of video-sharing app TikTok. The U.S. and China have finalized a deal to transfer the American version of TikTok to new owners, Bessent revealed today.
Bessent declined to provide additional details about the finalized deal, noting that he wasn’t “part of the commercial side of the transaction.”
“My remit was to get the Chinese to agree to approve the transaction, and I believe we successfully accomplished that over the past two days,” he explained.
Under the framework unveiled last month in Trump’s executive order, TikTok’s parent company ByteDance will own less than 20% of the popular video-sharing platform and “certain investors” will get 80% of it. The President previously said that Oracle co-founder Larry Ellison, tech mogul Michael Dell, and News Corp Chairman Emeritus Sir Rupert Murdoch will play a role in the TikTok deal.