Washington, Oct 30: The United States and China are not going to resolve all the issues that divide them before Presidents Donald Trump and Xi Jinping meet Thursday in Busan, South Korea.
But they are likely to make enough progress on China’s stranglehold on strategic minerals, American export controls and other nettlesome problems to calm financial markets and prevent their rivalry from doing much more economic damage for now.
“They’re trying to get to some kind of detente,” said Jeff Moon, a former US trade official and diplomat who now runs the China Moon Strategies consultancy. “There’s no pretense that they’re going to reach a grand bargain that solves everything in the relationship.’
The two countries sent out reassuring signals over the weekend that an agreement was drawing closer.
China’s top trade negotiator, Li Chenggang, told reporters that Washington and Beijing had reached a “preliminary consensus.” Trump’s treasury secretary, Scott Bessent, said there was “a very successful framework.”
Trump himself expressed confidence, saying Chinese officials “want to make a deal and we want to make a deal.”
Before the talks in Kuala Lumpur, Malaysia, over the weekend, US and Chinese negotiators had previously met four times this year — in Geneva in May, London in June, Stockholm in July and Madrid in September — but had only managed to reach a truce to avoid escalating tariffs and a vague deal “framework,” not anything of substance.
When new tensions rose earlier this month, Trump had been threatening to slap another 100 per cent tariff on Chinese products November 1 — on top of an already-high 57.6 per cent, according to calculations by Chad Bown of the Peterson Institute for International Economics.
But in a sign the two countries are making progress, Bessent said Sunday on CBS’ “Face the Nation’ that those punishing triple-digit levies are “effectively off the table’ as talks continue.
Here are some of the areas of contention between the world’s two biggest economies.
China is the world’s leading producer and processor of rare-earth minerals and related technologies critical for fighter jets, robots, electric vehicles and a host of other high-tech products.
In a show of strength and of the leverage it brings to the negotiating table, the country has limited exports of the elements, crippling US and other foreign companies. Most recently, they tightened the restrictions October 9, just ahead of the Trump-Xi summit.