Representatives of the American and Chinese governments have agreed upon a framework for a possible trade deal between the U.S and China.
The leaders of the two nations, Donald Trump and Xi Jinping, are set to meet in South Korea on Thursday to negotiate terms for a trade deal. U.S Treasury Secretary Scott Bessent said that the nations’ delegations had “reached a substantial framework for the two leaders”, giving them the opportunity to start their talks on middleground.
Bessent has also alluded to the possibility that the agreement would see China resume their purchase of soybeans from the United States, something that they have not done since May.
China is the world’s biggest buyer of soybeans: their abstention from purchasing U.S soybeans has been a massive hit for U.S farmers.
Both nations appear to be keen on avoiding further trade escalations in a year that has already been wrought with tariff tumult between them.
The U.S and China have been exchanging trade blows since the beginning of U.S President Donald Trump’s second term, when he announced a sweeping 10% tariff on all Chinese goods imported into the U.S.
This sparked a cascade of back-and-forth retaliations. By May, the U.S was taxing Chinese imports by 145%, with some electronic products excluded, and the Chinese government was taxing American imports 125%.
Tensions de-escalted when the two nations agreed to a 90-day truce on May 12th, with the U.S and China lowering their tariff rates to 30% and 10% respectively. The truce was extended in August, tensions once again boiled over when China announced export controls on rare earth elements and critical minerals that were used in military applications.
That elicited a strong response from the Trump Administration, who threatened to hike Chinese tariffs back up to 100%.
Rare earths will likely be a central point in a potential deal between the two countries. China boasts a smothering monopoly over the world’s rare earth and critical mineral refining and production. Both are essential in products we rely on every day, like phones and computers, as well as the vast majority of modern military applications.
The Trump Administration views the United States’ reliance on China for these materials as a national security threat, and has been focusing its efforts on revamping rare earth and critical mineral mining and refining in the U.S.
