Malaysia Talks Raise Prospect of US-China Trade Breakthrough Ahead of Trump-Xi Meeting

Post by : Bianca Suleiman

Kuala Lumpur, Malaysia – Senior US and Chinese officials concluded intensive trade negotiations in Malaysia over the weekend, generating cautious optimism that the two economies may narrow their differences before a summit between President Donald Trump and President Xi Jinping later this week in South Korea.

The meetings, convened on the margins of the ASEAN summit, addressed core disputes including tariffs, controls on rare-earth exports and large-scale agricultural purchases. US Treasury Secretary Scott Bessent said negotiators had outlined a "framework" for leaders to refine, while China’s Vice Premier He Lifeng indicated a "basic consensus" had been reached on several contentious points.

Financial markets responded immediately: Japan’s Nikkei 225 climbed more than 2%, South Korea’s KOSPI advanced about 2.3%, and Hong Kong’s Hang Seng rose roughly 0.85% early Monday, reflecting improved investor sentiment over a potential de-escalation.

The urgency for agreement follows recent escalations, including China’s move to require export licences for certain rare-earth magnets and semiconductor-related materials, which sparked concerns over supply-chain disruption. In turn, President Trump warned of imposing a 100% tariff on Chinese goods, heightening fears of a wider trade conflict.

Delegations now plan to complete domestic approval steps for any measures negotiated, with key outstanding details expected to be discussed during the Trump-Xi meeting in Gyeongju, South Korea. Analysts say a firm deal could calm markets and reduce downside risks for technology and agricultural sectors globally.

Investors and industry groups remain vigilant as attention shifts to the summit, where outcomes will determine whether the world’s two largest economies can avert a prolonged dispute with broad international ramifications.