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Chinese Vice-Premier He Lifeng and US Treasury Secretary Scott Bessent have started a new round of trade talks in Kuala Lumpur, paving the way for a possible meeting between the presidents of the world’s two largest economies. The two sides are expected to discuss issues crucial to China-US economic and trade relations, China’s Ministry of Commerce confirmed on Thursday. The meeting in the Malaysian capital marks the fifth face-to-face meeting between He and Bessent since US President Donald Trump escalated his trade war in April. Bilateral relations between the two global powers have been volatile in recent weeks, but the talks – following a video call between He and Bessent a week earlier – could open the door to a potential de-escalation. Tensions flared after October 9, when Beijing announced further export controls on rare earth elements – minerals vital to the production of many hi-tech goods, including those in the defence industry. The move was widely seen as retaliation for Washington’s expanded entity list in late September. Trump swiftly responded with a threat to increase tariffs on Chinese goods by an additional 100 per cent, starting on November 1. Meanwhile, a temporary trade truce between the two countries is set to expire next month. Tensions have since eased slightly after Trump softened his tone, saying the levy was “not sustainable”. But a Reuters report on Wednesday suggested that Washington might impose new export curbs on US-made critical software destined for China. “All options are on the table,” Bessent said in an interview with Fox Business Network on Wednesday, adding that he hoped both sides would resolve some of their differences this weekend so their presidents can “enter their talks on a more positive note”. “It would be a shame to waste their first in-person meeting during President Trump’s second term trying to get past some problems, rather than moving towards a more constructive dialogue between the US and China,” he said. Trump and President Xi Jinping will meet on Thursday on the sidelines of the Asia-Pacific Economic Cooperation forum in South Korea, according to the White House. Trump, who has spoken optimistically about the talks, confirmed that the two leaders have a “pretty long meeting scheduled”. “We’ll make a deal on, I think, everything,” he told reporters in the Oval Office during a meeting with Nato Secretary General Mark Rutte on Wednesday, adding that the discussions could cover soybeans. China imported none from the US in September, Chinese customs data showed. However, in a move that piles up further US leverage in advance of next week’s planned meeting between Trump and Xi, the US trade representative announced an investigation on Friday into Beijing’s compliance with the Phase One Trade Agreement. He and Bessent last met in Madrid in September, when China and the US were said to have agreed on a “framework” for a TikTok deal. They had previously met in Stockholm in late July, London in June and Geneva in May. More to follow...
