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In a rapid shift of tone and strategy, Scott Bessent, US Treasury Secretary, announced that the US and China have reached a “very substantial framework” deal that could remove the threat of Donald Trump’s looming 100% tariff on Chinese goods set to start November 1st.
Speaking on multiple major news networks, Bessent confirmed that during high-level negotiations with China’s Vice Premier He Lifeng and negotiator Li Chenggang on the sidelines of the ASEAN Summit in Kuala Lumpur, both sides agreed to pause the tariff escalation and defer China’s export controls on rare earth minerals that had sparked the threat in the first place. “I expect we will not proceed with the additional 100% tariff,” Bessent said.
What’s Included in the Framework Deal?
The emerging arrangement reportedly includes several counter-measures and commitments from both sides:
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China agreeing to delay the implementation of export controls on rare earths and magnets, essential for tech and defence manufacturing.
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The US seeing China promise to resume large-scale purchases of US soybeans and agricultural goods, benefiting American farmers.
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Cooperation on the precursor chemicals used to produce Fentanyl, with China providing assistance to the US in combating the epidemic.
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A possible finalisation of the TikTok divestiture, with China agreeing to terms that the US demanded, clearing one key regulatory hurdle.
Bessent stressed that the threatened blanket 100% tariff on Chinese goods is “effectively off the table” a dramatic pivot from just weeks ago.
Why This Shift Matters
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Trade war de-escalation: The deal signals a major de-risking of what had been viewed as one of the most aggressive trade escalation scenarios in recent memory.
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Market relief: Investors and global supply chains are breathing easier, as the prospect of doubling tariffs was set to unsettle virtually every sector.
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Supply-chain stability: Rare earths and critical minerals, which factor into tech, defence and EV manufacturing, gain breathing room.
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Diplomatic leverage: The US shows that through tariff threats it can extract concessions, while China demonstrates strategic flexibility and fault lines in its trade posture.
Still Some Hurdles Ahead
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Details remain largely undisclosed many aspects of the framework still require formal approval in Beijing and Washington.
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The deal is preliminary, and enforcement or follow-through could falter if either side feels short-changed.
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Farmers, tech firms and miners will be closely watching whether promised Chinese agricultural purchases and mineral export delays materialise.
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The broader backdrop tariffs on other countries, US–EU friction, geopolitical tensions remains tricky and could still throw a wrench into the accord.
FAQs
Q: Did the US really reach a deal with China to stop the 100% tariff?
Yes. Treasury Secretary Bessent stated that the framework reached with China means the threatened 100% tariff is effectively “off the table,” pending final leader-level approval.
Q: What issues did the deal address?
It covers pausing China’s rare-earth export controls, significant Chinese purchases of US agricultural products, cooperation on fentanyl precursors and a path forward on the TikTok divestiture.
Q: Does this mean all tariffs will be removed?
Not yet. The current framework stops the 100% escalation and defers some measures but doesn’t eliminate all tariffs or trade barriers. Formal ratification still lies ahead.
Q: How will US farmers benefit?
China is expected to boost purchases of US soybeans and other ag goods, offering relief to farmers hit by previous Chinese market freezes.
Q: Will rare earth supply to the US improve?
Yes — the framework includes a planned delay by China on implementing export controls of rare earths and magnets for at least a year.
