Soybean Collapse and Rare Earth Tensions Drive High-Stakes China-US Trade Talks

China and the United States concluded a new round of high-stakes trade talks in Kuala Lumpur on October 24–27, 2025, as both nations sought to de-escalate tensions ahead of a potential meeting between President Donald Trump and Chinese leader Xi Jinping at the APEC summit in South Korea. The negotiations, held on the sidelines of the ASEAN Summit, focused on resolving disputes over rare earth exports, semiconductor trade restrictions, and agricultural tariffs, with Malaysia's neutral role highlighted as a key facilitator, according to an UkrAgroConsult report.

A central issue was the collapse of U.S. soybean imports into China, which hit zero tons in September 2025, a first since November 2018. High tariffs and Beijing's pivot to suppliers like Brazil and Argentina have cost American farmers billions, with Trump framing the halt as a "negotiation tactic" by China, UkrAgroConsult noted. Meanwhile, Beijing's new export controls on rare earth elements—critical for technology and defense industries—prompted Trump to threaten a 100% tariff on Chinese goods, accusing Beijing of "weaponizing" resources, according to a CryptoRank article.

The talks aimed to reset strained ties before the APEC summit, where Trump and Xi could outline a broader agreement. U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng—both key economic advisors to their leaders—led discussions, signaling a desire to balance progress with strategic leverage, CryptoRank reported. Analysts emphasized the urgency of extending the current trade truce, set to expire on November 10, to avoid further global economic fallout, according to a Seeking Alpha report.

Agricultural trade, particularly soybeans and corn, emerged as a potential breakthrough. China remains the world's largest soybean buyer, importing 12.87 million tons in September 2025, despite the U.S. slump. Fortune noted that a deal could revive billions in revenue for American farmers and stabilize global food prices, UkrAgroConsult observed.

The negotiations also underscored Malaysia's growing diplomatic influence. As ASEAN chair, Malaysia hosted the talks to avoid political pressure and leverage its role in semiconductor manufacturing, a sector vital to both economies. U.S. officials praised Kuala Lumpur's efforts to stabilize supply chains for electric vehicles and consumer electronics, the CryptoRank article added.

By October 26, Chinese trade negotiator Li Chenggang announced a preliminary consensus on extending the trade truce, fentanyl controls, and export regulations, though specific terms remained undisclosed, according to a U.S. News report. U.S. Trade Representative Jamieson Greer expressed optimism about a "productive meeting" between Trump and Xi, suggesting progress toward a resolution, Business Standard reported.

The talks, however, occurred amid broader geopolitical tensions. India's Prime Minister Narendra Modi skipped the ASEAN summit in person, reportedly to avoid a direct meeting with Trump, who has criticized New Delhi's continued oil imports from Russia, U.S. News reported. This highlights the complex interplay of trade and diplomacy in a region increasingly caught between U.S. and Chinese interests.

With the APEC summit approaching, both nations face pressure to avoid a trade war escalation. The outcome could shape not only bilateral relations but also global supply chains and economic stability.