Diplomats and trade officials from the United States and China emerged from two days of intensive negotiations in Kuala Lumpur on October 26, 2025, announcing a preliminary framework deal that could signal a much-needed de-escalation in the world’s most consequential economic rivalry. The fifth round of in-person talks since May, held on the sidelines of the Association of Southeast Asian Nations (ASEAN) summit, set the stage for a potentially pivotal meeting between President Donald Trump and President Xi Jinping, scheduled for October 30 in South Korea.
The American delegation, led by Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, met with Chinese Vice Premier He Lifeng and top trade negotiator Li Chenggang. Over five hours on Saturday and further discussions into Sunday, the two sides addressed a sprawling list of grievances and priorities, ranging from tariffs and rare earth export controls to fentanyl trafficking and agricultural trade.
"I think we have a very successful framework for the leaders to discuss on Thursday," Bessent told reporters, referring to the upcoming Trump-Xi summit. He added that the talks were "very substantial negotiations," and that the outcome would be presented to both presidents for their consideration. According to Bessent, the agreement could defer China’s expanded export controls on rare earth minerals and stave off a threatened 100% U.S. tariff hike on Chinese goods, which President Trump had warned could begin as early as November 1.
Chinese negotiator Li Chenggang echoed the cautious optimism, describing the outcome as a "preliminary consensus" that would undergo domestic approval in both countries. "The U.S. position has been tough," Li acknowledged, "whereas China has been firm in defending its own interests and rights." He characterized the process as involving "very intense consultations and constructive exchanges in exploring solutions and arrangements to address these concerns." According to Li, both sides believe a stable U.S.-China relationship is fundamentally beneficial, not just for their own citizens, but for the world as a whole.
The substance of the deal, while still subject to final sign-off, reflects the urgency on both sides to prevent an escalation of the trade war, which has seen tit-for-tat tariffs reach as high as 145% by the U.S. and 125% by China in the past year. The current truce, first agreed in May and extended in August, is set to expire on November 10, 2025. In the weeks leading up to the Kuala Lumpur talks, tensions had flared anew, with both sides imposing fresh sanctions, export curbs, and threats of even harsher retaliatory measures.
The negotiations touched on a wide range of issues. According to Reuters and the South China Morning Post, the agenda included extending the tariff truce, addressing China’s new export controls on rare earths that have disrupted global supply chains, and finding ways to expand bilateral trade. U.S. officials also pressed for increased Chinese purchases of American soybeans and agricultural products—a longstanding demand from American farmers and a political priority for President Trump.
Another major topic was the U.S. fentanyl crisis. The preliminary consensus reportedly includes cooperation on stemming the flow of fentanyl and its precursors from China to the United States, a point of contention that had previously led the U.S. to impose 20% tariffs on certain Chinese goods. Ship levies and U.S. port entrance fees also featured in the discussions, as did the fate of the social media platform TikTok and broader concerns about digital technology transfers.
On the diplomatic front, President Trump arrived in Kuala Lumpur on October 26, marking the start of a five-day Asia tour that will also take him to Japan and, crucially, to South Korea for his face-to-face with Xi. Trump, who was received by Malaysian Prime Minister Anwar Ibrahim, participated in the ASEAN-U.S. Summit and was present for the signing of a peace accord between Cambodia and Thailand. Addressing reporters aboard Air Force One, the president struck a characteristically bullish tone: "They have to make concessions. I guess we would, too. We’re at 157% tariff for them. I don’t think that’s sustainable for them, and they want to get that down, and we want certain things from them."
Despite the White House’s official announcement of the Trump-Xi meeting, Beijing has yet to confirm the summit, underscoring the fragility of the diplomatic moment. Trump indicated that future meetings could take place in both countries, hinting at possible summits in China and the United States, either in Washington or at his Mar-a-Lago estate.
The stakes for the upcoming talks are high. Among Trump’s stated priorities are Chinese purchases of U.S. soybeans, concerns about Taiwan—which Beijing claims as its own territory—and the release of jailed Hong Kong media tycoon Jimmy Lai, whose detention has become a symbol of China’s crackdown on dissent in the former British colony. Trump has also signaled that he will seek China’s assistance in managing Washington’s fraught relationship with Russia, as the war in Ukraine grinds toward its fourth year.
For its part, China has been adamant about defending its core interests. Vice Premier He Lifeng was quoted by Xinhua as saying, "The U.S. and China bilateral trade relationship is win-win in nature fundamentally. Stabilising the relationship between both countries is in line with the interests of the people and matches the world’s expectations." He Lifeng’s message was clear: both sides have much to lose if the trade war spirals out of control.
The talks in Malaysia followed four previous rounds in Geneva, London, Stockholm, and Madrid, underscoring the complexity and persistence of the dispute. According to the Associated Press, the negotiators spent more than five hours in talks on Saturday alone, with both sides exploring ways to extend the truce and address rare earths, among other issues.
The broader context is one of mutual wariness. In the days before the Kuala Lumpur summit, the U.S. launched a new tariff investigation into what it described as China’s "apparent failure" to comply with the 2020 "Phase One" trade deal. This new probe adds yet another layer of uncertainty to an already fraught relationship, as both sides prepare to present the Kuala Lumpur framework for internal approval.
As the world watches, the preliminary consensus reached in Malaysia offers a potential off-ramp from escalating hostilities, but it is far from a final resolution. The next chapter will unfold when Trump and Xi meet in South Korea, with the fate of the global economy—and the livelihoods of millions—hanging in the balance.
For now, the diplomatic machinery grinds on, with both Washington and Beijing hoping that pragmatism and dialogue can prevail over confrontation. Whether the fragile peace holds, or gives way to renewed conflict, remains to be seen.