US-China Trade Talks Expected Next Week as Trump Softens Tariff Stance

As Trump Softens Tariff Position, US-China Trade Talks May Resume Next Week

The United States and China are set to hold another round of high-stakes trade talks next week, with both sides signaling renewed optimism for de-escalation after months of tariff threats and strained rhetoric. Treasury Secretary Scott Bessent confirmed that he and Chinese Vice Premier He Lifeng will meet in Malaysia, marking what could be a pivotal moment in efforts to stabilize relations between the world’s two largest economies.

Bessent, speaking at a White House event, said he would hold preliminary discussions with He on Friday evening before the in-person negotiations expected to take place “probably a week from tomorrow.” The meeting will serve as a preparatory session for an anticipated face-to-face summit between President Donald Trump and President Xi Jinping, expected to occur on the sidelines of the Asia-Pacific Economic Cooperation (APEC) Summit in South Korea later this month.

Trump Expresses Optimism Ahead of Xi Meeting

President Donald Trump appeared notably upbeat about the prospects for progress in US-China relations, suggesting that his administration’s engagement strategy may soon yield results. “I think we’re doing very well. I think we’re getting along with China,” Trump told reporters, striking a conciliatory tone that contrasted sharply with his earlier threats of renewed tariffs.

The president’s remarks came just days after he hinted at canceling his upcoming meeting with Xi, citing frustrations over Beijing’s export controls on rare-earth elements — a crucial resource for US defense and technology sectors. However, on Friday, Trump appeared to dial back that rhetoric, calling the return of 100% import surtaxes on Chinese goods “not sustainable” during a televised interview with Fox Business.

Also Read : Trump Extends Auto Tariff Relief, Imposes 25% Import Duty on Trucks and Buses

A Fragile Trade Truce Nears Expiration

The upcoming discussions follow a fragile truce reached earlier this year, under which Washington agreed to pause 145% tariffs on a range of Chinese imports, while Beijing pledged to resume exports of rare-earth magnets. That temporary détente, credited with calming financial markets at the time, is set to expire in November unless both nations agree to extend or renegotiate its terms.

Analysts say the Kuala Lumpur talks could play a decisive role in shaping what comes next. Both sides are expected to address tariff timelines, export restrictions, and the potential for reciprocal market access, though officials have downplayed the likelihood of a sweeping deal.

“These discussions are not about ending competition,” said a senior administration official. “They’re about managing it responsibly to avoid a trade rupture that harms global growth.”

Fifth Round of Bilateral Talks to Focus on Tariff Framework

The meeting in Malaysia represents the fifth round of bilateral negotiations between Bessent and He Lifeng. Previous rounds held in Madrid, Stockholm, London, and Geneva laid the groundwork for renewed engagement but failed to produce a lasting settlement.

This time, officials suggest the agenda will prioritize tariff moderation, supply chain cooperation, and industrial policy transparency. The rare-earth supply chain — critical to semiconductors, electric vehicles, and defense technology — remains at the center of disputes.

“The US is looking for commitments that will ensure a stable supply of rare-earth magnets and components,” said one trade analyst. “In exchange, China wants clarity on US tariff structures and a pathway for reducing duties on strategic exports.”

Economic Stakes Remain High for Both Nations

Despite the apparent thaw, both Washington and Beijing face considerable economic pressure. In the US, manufacturers have warned that escalating tariffs could drive up production costs and slow industrial growth. Meanwhile, China’s exporters are grappling with reduced demand amid global economic uncertainty and shifting supply chains.

A protracted trade standoff could further disrupt industries from electronics to electric vehicles, with ripple effects across Asia and Europe. “We’ve seen what tariff escalation does to markets and consumer prices,” said an economist with the Peterson Institute. “Both leaders have incentives to show progress before the APEC Summit.”

Bessent: ‘Things Have De-escalated’

Treasury Secretary Bessent sought to reassure markets that tensions were cooling, telling reporters, “I think things have de-escalated. We hope that China will show the respect that we have shown them.” He added that President Trump’s personal rapport with Xi Jinping would be key to steering talks “back on a good course.”

While optimism has resurfaced in Washington, trade experts caution that the path to normalization remains uncertain. “Trump’s negotiating style is unpredictable,” said a former diplomat. “But the fact that both sides are still talking is a positive sign for global markets.”

Outlook: A Test of Diplomacy Before APEC Summit

With the APEC leaders’ summit just weeks away, the Malaysia talks will likely serve as a barometer for whether a broader trade thaw is achievable. Observers say the Trump-Xi meeting could set the tone for US-China relations heading into 2026 — determining whether the two powers drift further toward confrontation or find a formula for coexistence.

For now, both sides appear motivated to prevent a return to the brink. As Bessent put it, “This is about managing competition, not conflict — and keeping open the lines of communication that matter most.”

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