US and China To Pause 100 Percent Tariffs and Rare Earth Export Controls

In a major breakthrough, top economic officials from the U.S. and China have drafted a trade deal, which is expected to be finalized by President Donald Trump and Chinese President Xi Jinping.

The agreement is set to halt the escalation of 100 percent tariffs and Chinese rare earths export controls, and resume U.S. soybean sales to China.

The trade deal was discussed during the ASEAN Summit in Kuala Lumpur. U.S. Treasury Secretary Scott Bessent indicated that the looming threat of Trump’s 100% tariffs on Chinese imports, due to commence on November 1, has been averted, reports Reuters.

Bessent also expects China to delay its rare earth minerals and magnets licensing regime by a year.

While Chinese officials have not disclosed much about the discussions, Bessent expressed confidence about the structure for the leaders’ meeting on Thursday.

He anticipates an extension of the tariff truce with China beyond its November 10 expiration date and a resurgence of significant U.S. soybean purchases by China.

Also Read: Trump’s 100% Tariff Threat Turns China’s Rare-Earth Play Into A Dangerous Gamble

U.S. Trade Representative Jamieson Greer stated that both sides agreed to pause some punitive actions and found “a path forward where we can have more access to rare earths from China, we can try to balance out our trade deficit with sales from the United States.”

China’s top trade negotiator Li Chenggang said that the two sides reached a “preliminary consensus” and will next go through their respective internal approval processes.

Trump and Xi are scheduled to meet on Thursday on the sidelines of the Asia Pacific Economic Cooperation (APEC) summit in Gyeongju, South Korea to finalize the terms.

The impending trade deal marks a significant step towards easing the prolonged trade tensions between the two economic powerhouses. The agreement will not only halt the escalation of tariffs but also ensure the resumption of U.S. soybean sales to China, which had been severely impacted due to the trade war.

The deal also indicates a positive shift in China’s stance on rare earth minerals, a critical resource for the tech industry. The finalization of this deal could potentially usher in a new era of improved trade relations between the U.S. and China.

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