KUALA LUMPUR, Malaysia — A trade deal between the United States and China is drawing closer, officials from the world's two largest economies said Sunday as they reached an initial consensus for President Donald Trump and Chinese leader Xi Jinping to aim to finalize during their high-stakes meeting.
Any agreement would be a relief to international markets even it does not address underlying issues involving manufacturing imbalances and access to state-of-the-art computer chips.
Beijing recently limited exports of rare earth elements that are needed for advanced technologies, and Trump responded by threatening additional tariffs on Chinese products. The prospect of a widening conflict risked weakening economic growth worldwide.
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."
Trump also expressed confidence that an agreement was at hand, saying the Chinese "want to make a deal and we want to make a deal." The Republican president is set to meet with Xi on Thursday in South Korea, the final stop of his trip through Asia. Trump reiterated that he 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 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.
The progress toward a potential agreement came during the annual summit of the Association of Southeast Asian Nations, in Kuala Lumpur, with Trump seeking to burnish his reputation as an international dealmaker.
Yet his way of pursuing deals has meant serious disruptions at home and abroad. His import taxes have scrambled relationships with trading partners while a U.S. government shutdown has him feuding with Democrats.
Trump attends ceasefire ceremony between Thailand and Cambodia
At the summit, Thailand and Cambodia signed an expanded ceasefire agreement during a ceremony attended by Trump. His threats of economic pressure prodded the two nations to halt skirmishes along their disputed border earlier this year.
Thailand will release Cambodian prisoners and Cambodia will begin withdrawing heavy artillery as part of the first phase of the deal. Regional observers will monitor the situation to ensure fighting doesn't restart.
"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," and Thai Prime Minister Anutin Charnvirakul said the agreement creates "the building blocks for a lasting peace."
The president signed economic frameworks with Cambodia, Thailand and Malaysia, some of them aimed at increasing trade involving critical minerals. The United States wants to rely less on China, which has used limited on exports of key components in technology manufacturing as a bargaining chip in trade talks.
"It's very important that we cooperate as willing partners with each other to ensure that we can have smooth supply chains, secure supply chains, for the quality of life, for our people and security," U.S. Trade Representative Jamieson Greer said.
Trump reengages with a key region of the world
Trump attended this summit only once during his first term, and U.S. Defense Secretary Pete Hegseth seemed unfamiliar with ASEAN during his confirmation hearing in January.
This year's event was a chance for Trump to reengage with nations that have a combined $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 said. He described his counterparts as "spectacular leaders" and said that "everything you touch turns to gold."
Trump's tariff threats were credited with helping spur negotiations Thailand and Cambodia. Some of the worst modern fighting between the two countries took place over five days in July, killing dozens and displacing hundreds of thousands of people.
The president threatened, at the time, to withhold trade agreements unless the fighting stopped. A shaky truce has persisted since then.
Malaysian Prime Minister Anwar Ibrahim praised the agreement between Thailand and Cambodia, saying at the summit that "it reminds us that reconciliation is not concession, but an act of courage."
Tariffs are in focus on Trump's trip
Trump met Brazilian President Luiz Inácio Lula da Silva in Kuala Lumpur, who was also attending the summit. There has been friction between them over Brazil's prosecution of Jair Bolsonaro, the country's former president and a close Trump ally. Bolsonaro was convicted last month of attempting to overturn election results in his country.
During their meeting, Trump said he could reduce tariffs on Brazil that he enacted in a push for leniency for Bolsonaro.
"I think we should be able to make some good deals for both countries," he said.
While Trump was warming to Lula, he avoided Canadian Prime Minister Mark Carney. The president is angry with Canada because of a television advertisement protesting his trade policies, and on his way to the summit, announced on social media he would raise tariffs on Canada because of it.
One leader absent from the summit was Indian Prime Minister Narendra Modi. Although he was close with Trump during Trump's first term, the relationship has been more tense lately. Trump caused irritation by boasting that he settled a recent conflict between India and Pakistan, and he has increased tariffs on India for its purchase of Russian oil.
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