Description: Trade representatives from China and the US met on the sidelines of the ASEAN Summit, taking place in Kuala Lumpur, where they have reportedly agreed on a variety of disputed trade points ahead of a crucial leaders meeting between US President Trump and Chinese President Xi in South Korea this week. US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer met with Chinese Premier He Lifeng and China’s top trade negotiator Li Chenggang as they discussed China’s reduction of restrictions regarding rare earth minerals, the country’s cessation of chemical production related to fentanyl arriving in the US and China’s substantial purchases of soybean and other agricultural products from the US. The discussions also yielded the finalization of the agreement regarding the sale of TikTok’s branch in the US which is expected to be finalized when the presidents meet in South Korea later this week.
Impact: Following weeks of diplomatic and political trade posturing, the US and China and expected to finalize a preliminary trade agreement in the confines of the leaders meeting in South Korea between presidents Trump and Xi. The US and China in recent weeks have undertaken hostile trade measures such as China’s introduction of elevated trade restrictions regarding rare earth minerals and the additional shipping fees introduced by the US as a proportionate response. The posturing on both sides only strengthened the codependency in the bilateral trade relations and emphasized that neither economic power can exercise trade nor economic stability on the global markets without the other. The return to the traditional adversarial fault lines in bilateral relations is expected to be concluded when Trump and Xi meet later this week while the outcome of the trade war came at a cost for both countries and destabilized the economies of the smaller countries in the respected orbits of influence on both sides. Depending on the provisions outlined in the agreement and taking into account that the primary purpose of the trade war was to hamper China’s economic growth and dominance, Trump concludes the tariff trade cycle relatively successful.