Averting a Trade Storm: U. S. and China's High-Stakes Meeting

In a bid to prevent their trade war from heating up, the U. S. and China are set to hold crucial talks in Kuala Lumpur. The meeting, happening on the sidelines of the ASEAN summit, aims to smooth things over before a potential sit-down between Presidents Trump and Xi next week. The tension kicked off when Trump threatened to slap 100% tariffs on Chinese goods and tighten trade restrictions starting November 1. This came after China expanded its export controls on rare earth magnets and minerals, which are pretty important in tech and military gear. Things have been shaky since May when U. S. Treasury Secretary Scott Bessent, U. S. Trade Representative Jamieson Greer, and Chinese Vice Premier He Lifeng worked out a truce. But recent moves by both sides have put that agreement in jeopardy. The big question is whether they can find common ground on rare earths and tech export curbs. If they can't, the meeting between Trump and Xi might not happen. Josh Lipsky, an international economics expert, thinks the U. S. wants China to backtrack on its rare earth controls, but China might not budge. Details about the meeting are scarce. The venue was only confirmed when Chinese officials showed up at the Merdeka 118 tower, the second-tallest building globally. Trump is expected to arrive in Kuala Lumpur on Sunday, and he might be the one to share any updates. The stakes are high. If the U. S. and China can't strike a deal, their trade war could escalate, hurting both economies. Scott Kennedy, a China economics expert, warns that if no deal is made, things could get much worse. The U. S. and China are trying to avoid a repeat of the tariff hikes that happened in April. Back then, Trump imposed broad tariffs, and China hit back by cutting off rare earth supplies to the U. S. The truce that followed brought tariffs down and restarted the flow of magnets. But it started to fall apart when the U. S. expanded its export blacklist, adding thousands more Chinese firms. China then retaliated with new rare earth export controls. The U. S. blasted China's move as a "global supply chain power grab" and vowed not to accept the restrictions. Meanwhile, the Trump administration is considering more export curbs on China, including software-powered goods like laptops and jet engines. Adding to the tension, the U. S. announced a new tariff probe into China's "apparent failure" to meet the terms of the 2020 U. S. -China "Phase One" trade agreement. This could give Trump more legal grounds to increase tariffs on Chinese imports. China committed to buying more U. S. farm products, manufactured goods, energy, and services in the 2020 deal, but those targets were never met. This could push the U. S. to ask China to start buying American soybeans again, especially after China bought none in September.