U.S.-China Trade Talks Edge Toward Truce Amid Escalating Tit-for-Tat Tariffs

U.S. and Chinese trade negotiators have made progress in recent discussions, with both sides expressing optimism about reaching a preliminary agreement ahead of a potential meeting between President Donald Trump and Chinese President Xi Jinping. U.S. Trade Representative Jamieson Greer stated on October 26 that the talks, held in Kuala Lumpur, are nearing agreement. The negotiations, which began on October 25, covered rare earths and tariffs.

Chinese Vice Premier He Lifeng and top trade negotiator Li Chenggang participated in the talks, emphasizing the need to de-escalate tensions amid escalating threats from both nations. The U.S. has proposed new tariffs of up to 157% on Chinese goods starting November 1, citing concerns over fentanyl smuggling and rare earth export controls. Trump has framed the tariffs as a response to China's alleged role in funneling fentanyl into the U.S. via Venezuela, though he has also signaled openness to resolving the issue through direct talks with Xi, saying China profits from fentanyl.

China, meanwhile, has retaliated with reciprocal measures. The Ministry of Transport (CMOT) announced additional port charges on vessels with U.S. ties, mirroring U.S. Section 301 tariffs targeting Chinese maritime and logistics sectors. These charges, which increase annually, are designed to pressure U.S.-linked shipping operations while exempting Chinese-built vessels. Analysts note the measures reflect a tit-for-tat escalation, China’s new port charges could have ripple effects on global shipping costs and trade routes.

The talks come amid heightened geopolitical tensions. Trump's five-day Asian tour, which includes a planned summit in South Korea, underscores the urgency of resolving disputes before the U.S. presidential election. While Beijing has yet to confirm the leaders' meeting, White House officials emphasized securing a deal to avoid further economic fallout.