Top economic officials from the United States and China convened in Kuala Lumpur on Saturday to avert fresh escalation in their ongoing trade war.

The talks, taking place on the sidelines of the ASEAN summit, are part of efforts to pave the way for a bilateral meeting between President Donald Trump and Chinese President Xi Jinping next week in South Korea.

The meeting comes amid rising tensions following President Trump’s threat to impose new 100 per cent tariffs on Chinese goods from 1 November. These proposed measures are in response to Beijing’s expanded export controls on rare earth magnets and minerals, a critical component in global manufacturing and defence industries. The United States has also extended its export blacklist to include thousands of Chinese firms, further straining trade relations.

Officials leading the discussions include US Treasury Secretary Scott Bessent, US Trade Representative Jamieson Greer, and Chinese Vice Premier He Lifeng, joined by China’s top trade negotiator Li Chenggang. The secretive meeting, held at the Merdeka 118 tower, has not been accompanied by official briefings or detailed statements from either delegation.

The talks are expected to focus on finding an interim arrangement covering tariffs, technology exports, and agricultural trade, particularly soybean purchases. President Trump signalled that he intends to highlight the plight of American farmers during his discussions with Xi. He also indicated he will raise the sensitive subjects of Taiwan and the imprisonment of Hong Kong media businessman Jimmy Lai, which he described as issues of international concern.

Observers believe the session is crucial to restoring confidence in the fragile truce negotiated earlier this year. That agreement, initially reached in May between Bessent, Greer, and He, lowered US tariffs to about 55 per cent and China’s to 30 per cent, while resuming rare earth supplies. It was extended following subsequent negotiations in London and Stockholm but began to unravel after Washington’s decision to widen its export blacklist in late September.

Beijing retaliated on 10 October by tightening rare earth export licences globally, citing the need to restrict potential military applications. The United States branded this move a strategic power play threatening global supply chain stability. Washington is now preparing additional export restrictions targeting software-based technologies, reflecting an intensifying economic rivalry beyond traditional goods trade.

The administration’s latest probe, announced on Friday, will examine China’s alleged non-compliance with the 2020 trade deal signed during Trump’s first term.

The investigation could empower the President to justify deeper tariffs legally if violations are confirmed. The agreement had required Beijing to significantly increase its purchase of American agricultural, energy, and manufactured goods, but these commitments remain largely unmet.

China’s suspension of US soybean imports in September has compounded financial stress among American farmers, a politically important group within Trump’s support base. Economic analysts warn that a collapse of these Kuala Lumpur discussions could push tariffs back to triple-digit levels not seen since early 2024, jeopardising fragile improvements in global trade stability.

Both Washington and Beijing appear intent on preventing a breakdown but remain divided over strategic sectors such as semiconductors and rare earths. While the Kuala Lumpur dialogue aims to reduce immediate risks, officials acknowledge that any lasting resolution will require significant compromises on both sides before next week’s high-level summit in South Korea.

Based On ANI Report