Inside Trump’s trade push: What to know about the emerging U.S.–China deal and its global stakes

Trump’s dual diplomacy in Asia

A trade deal between the United States and China appears within reach, according to officials from both nations, after negotiators reached an initial consensus for Presidents Donald Trump and Xi Jinping to finalise during their upcoming high-stakes meeting in South Korea.

Any agreement would likely ease pressure on global markets, even if it stops short of addressing structural issues over manufacturing imbalances and access to cutting-edge computer chips.

Tensions have been rising in recent weeks. Beijing restricted exports of rare earth elements vital for advanced technologies, prompting Trump to threaten new tariffs on Chinese goods — fuelling fears of a broader economic slowdown.

China’s chief trade negotiator, Li Chenggang, said the two sides had reached a “preliminary consensus”, while Trump’s Treasury Secretary Scott Bessent described the outcome as “a very successful framework.”

Trump voiced optimism, saying the Chinese “want to make a deal and we want to make a deal.” The Republican president is set to meet Xi on Thursday in Seoul, the final stop of his Asia tour.

According to Bessent, the threat of additional tariffs on China is “effectively off the table.” He said discussions had produced initial agreements to curb precursor chemicals for fentanyl entering the United States and that Beijing would make “substantial” purchases of soybeans and other agricultural products while pausing export limits on rare earths.

When asked how close a final deal was, Trump’s trade representative Jamieson Greer said it would “really depend” on the meeting between the two presidents.

Trump also reaffirmed plans to visit China in the future and hinted that Xi might travel to Washington or Mar-a-Lago, his private club in Florida.

The progress on trade came alongside a surprise diplomatic success at the Association of Southeast Asian Nations (ASEAN) summit in Kuala Lumpur, where Trump attended a ceremony formalising an expanded ceasefire between Thailand and Cambodia.

The two neighbours agreed to halt skirmishes along their disputed border, release prisoners, and withdraw heavy artillery — with regional monitors ensuring compliance.

“We did something that a lot of people said couldn’t be done,” Trump said. Cambodian Prime Minister Hun Manet called it a “historic day,” while Thai Prime Minister Anutin Charnvirakul said the deal laid “the building blocks for a lasting peace.”

Trump’s attendance at ASEAN — his first since returning to office — signals a renewed push to reengage with Southeast Asia, a region that collectively represents a $3.8 trillion economy and 680 million people.

“The United States is with you 100%, and we intend to be a strong partner and friend for many generations to come,” Trump told regional leaders, describing them as “spectacular leaders” and praising their economic potential.

Analysts say Trump’s mix of pressure and personal diplomacy — including tariff threats — helped push Thailand and Cambodia toward peace and reinvigorated U.S. influence in the region.

In Kuala Lumpur, Trump also met Brazilian President Luiz Inácio Lula da Silva, hinting at possible tariff reductions if Brazil showed leniency toward Jair Bolsonaro, Trump’s ally and Brazil’s former president.

He notably avoided Canadian Prime Minister Mark Carney, after a spat over a Canadian ad criticising his trade policies. On social media, Trump announced new tariffs on Canada in retaliation.

Indian Prime Minister Narendra Modi was absent from the summit amid growing tension with Washington over trade and defence issues, including India’s continued oil purchases from Russia.

The dual-track diplomacy — pressing China for economic concessions while brokering peace between smaller Asian nations — reflects Trump’s effort to reassert U.S. leverage in Asia.

By combining tariffs with negotiation, Trump is positioning himself once again as a dealmaker on the world stage, even as domestic political divisions persist over his trade tactics and shutdown threats.

Whether his approach leads to durable agreements or temporary truces will become clear in the weeks following his meeting with Xi — a moment that could redefine both global trade and America’s role in Asia.

(With AP inputs)