Trump administration officials say negotiators have reached a “substantial framework” for a deal that the president and China’s Xi Jinping will discuss this week. The outline includes pausing or removing some US tariffs and delaying parts of China’s expanded licensing system on rare earth minerals. It aims to nudge the relationship back toward where it stood earlier this year, before the latest tariff spiral, the New York Times reported.
What each side is putting on the table
According to officials, Washington would step back from a planned 100 percent increase in tariffs on Chinese exports that was scheduled for Nov. 1. Beijing, in turn, would delay its rare-earths licensing system for a year while it re-examines it, commit to “substantial” purchases of American soybeans, and assist US efforts to stem the flow of chemical inputs used to make illicit fentanyl. The framework emerged from talks in Malaysia and is set to be taken up when the leaders meet in South Korea on Thursday.
Why this feels like déjà vu
The United States and China have repeatedly escalated trade tensions and then hurried into truces, only to watch them crumble. Critics argue the administration is now touting fixes to problems it helped create: China’s soybean purchases slowed after Beijing retaliated against Trump’s tariffs earlier this year, and the rare-earths licensing push grew after sweeping “Liberation Day” tariffs in April and further US tech restrictions this month.
How we got here
Compared with Trump’s first term, both capitals have been more willing to take dramatic actions. Early in his return to office, Trump imposed a 20 percent tariff on all Chinese exports over fentanyl concerns, then added another 125 percent tariff later reduced to 10 percent, and threatened an additional 100 percent levy as of Nov. 1. China answered with its own tariffs, investigations into major US firms, and expanded curbs on rare earths. Companies trading across the Pacific have borne the brunt as supply chains and legal obligations split in opposite directions.
The political sales pitch—and the pushback
Top officials framed the framework as a win for farmers and a brake on runaway escalation. On social media, the agriculture secretary praised planned soybean purchases as “big news” that would bring the market “back into balance.” Analysts and former officials were more sceptical. One consultant called the strategy “escalating to de-escalate,” noting this is the fifth set of talks dominated by rare-earth curbs. Another expert warned the situation remains “inherently unstable,” with both sides convinced they hold the upper hand.
What’s not being solved
The outline focuses on near-term trade irritants and sector-specific bargaining chips—soybeans, rare earths, even a possible TikTok-related discussion—rather than the structural issues that originally fuelled the clash. A Brookings Institution fellow noted that the agenda appears to sidestep the “big, meaty” concerns: China’s industrial policy, technology ambitions and the long-running disputes over how both economies compete.
Business on the fault line
American companies remain caught in the middle. Some factories are only weeks away from halting production without fresh shipments of Chinese rare-earth metals and magnets. Conflicting directives from Washington and Beijing have left firms worried about how to comply with both sides at once. Even a temporary pause may not resolve those operational risks if deeper rules and timelines remain vague.
Why this deal is narrower than past efforts
Talks this year have been far less intensive than in Trump’s first term, when months of negotiation produced a 90-page pact. On Friday, the administration announced an investigation into China’s failure to meet that earlier agreement’s terms. Against that backdrop, the current framework looks more like a damage-limitation exercise than a blueprint for durable peace.
What to watch next
If Trump and Xi can turn the framework into concrete commitments—clear timelines, verification, and dispute mechanisms—the truce could hold long enough to ease immediate strain. But the path is precarious. Forecasts still point to more bargaining over the coming days, and officials concede intensity could fluctuate. The chance of direct US impact remains low in the near term, yet the broader relationship sits in what one expert called “a very, very dangerous place.”
Bottom line
The proposed deal trims the sharpest edges of a confrontation that both sides helped sharpen. It may avert the tariff spike and delay rare-earth hurdles, offering short-term relief to farmers and manufacturers. But without tackling the structural rifts that keep drawing Washington and Beijing back to the brink, it is a fragile pause—useful for now, vulnerable to the next shock.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
