China and the United States have agreed to resume a fresh
round of trade negotiations next week, seeking to de-escalate escalating tariff
tensions amid recent harsh measures including rare earth export restrictions by
China and retaliatory tariff threats by the US. The decision follows a candid
video call between China’s Vice Premier He Lifeng and US Treasury Secretary
Scott Bessent, with both sides committed to continued, constructive bilateral discussions.
China and US Commit to Renewed Trade Dialogue
China and the United States reached an agreement on Saturday
to hold another round of face-to-face trade talks in the coming week. This move
aims to avoid further damage from an ongoing cycle of tit-for-tat tariffs
between the world's two biggest economies, which have recently escalated
tensions significantly.
As reported by Da Chu and Heavey for Reuters, the talks follow an earlier video call on Saturday morning between China’s Vice Premier He Lifeng and US Treasury Secretary Scott Bessent. The meeting was described by the Chinese state news agency Xinhua as involving
“candid, in-depth and constructive exchanges”
focused on implementing key agreements reached during
phone talks between the two heads of state earlier in the year and discussing
critical bilateral economic issues.
Bessent later characterised the conversation as “frank and
detailed” on social media, confirming both parties would meet “in person next
week to continue our discussions”.
Recent Tensions Triggering the Talks
Tensions escalated after China imposed greater restrictions
on the export of rare earth minerals — key components used in a wide range of
modern technologies from smartphones and semiconductors to electric vehicles
and military hardware. These restrictions, announced on October 10, mark the
first time China added military use to the export controls.
US President Donald Trump responded by threatening an
additional 100% tariff on Chinese goods set to begin November 1, intensifying
the trade conflict. Trump, speaking to Fox Business, admitted this tariff level
was likely unsustainable but framed it as a forced response to China’s
restrictive measures.
Trump said,
“It’s not sustainable, but that’s what the number is... It’s probably not, you know, it could stand, but they forced me to do that. I think we’re going to do fine with China.”
He also confirmed plans to
meet Chinese President Xi Jinping at the upcoming Asia-Pacific Economic
Cooperation (APEC) summit in South Korea, despite earlier hints the meeting might
be cancelled.
Multilateral and Global Implications
The renewed talks come as the US rallies G7 finance
ministers to coordinate a unified response to China’s rare earth export
controls. EU Economy Commissioner Valdis Dombrovskis told reporters the bloc is
working both bilaterally with the US and within the G7 to diversify rare earths
suppliers, although he recognised that China currently dominates global supply,
making alternative sources years away.
German Finance Minister Lars Klingbeil expressed hope that the scheduled meeting between Presidents Trump and Xi could help resolve much of the trade conflict. He stated,
“We have made it clear within the G7 that we do not agree with China’s approach,”
referring to the coalition of Britain,
Canada, France, Germany, Italy, Japan, and the US.
International Monetary Fund chief Kristalina Georgieva also
voiced hopes for an agreement to ease tensions, signalling the global economic
importance of a US-China trade détente.
Official Statements and Key Participants
Besides Vice Premier He Lifeng and Treasury Secretary Scott
Bessent, US Trade Representative Jamieson Greer also participated in the recent
call, which was highlighted by China’s official news agency Xinhua.
The Chinese Commerce Ministry criticised the US tariff threat, calling it an escalation that “is not the right way to get along with China.” A spokesperson stated,
“China’s position on the trade war is consistent. We do not want it, but we are not afraid of it.”
In Washington, Bessent has accused China of harming global
interests by tightening critical rare earths exports, underscoring the
strategic stakes for technologies and industries worldwide.
The upcoming talks will focus on addressing these complex
economic issues after a tumultuous period marked by tariff hikes and export
curbs.
Background of the Trade Conflict
Trade tensions between the United States and China reignited
after Donald Trump’s return to office earlier this year, when he announced
sweeping tariffs on a range of imports. At times, the tariffs imposed between
the two countries reached triple-digit percentages, causing significant
disruption to global markets and supply chains.
Though some tariff reductions followed, the peace remained
fragile, with recent Chinese export controls on rare earth materials and
Trump’s tariff threats marking a new escalation phase.
China’s export restrictions are cited as being driven by security concerns, particularly regarding military applications of rare earth minerals, while the US opposes such controls fearing supply chain disruptions for advanced technologies essential to its economy and national security.