U.S.-China Trade Talks in Kuala Lumpur Aim to Avert Trade War, Secure Truce Extension

The United States and China resumed high-level trade negotiations in Kuala Lumpur, Malaysia, on October 24–27, 2025, aiming to ease escalating economic tensions ahead of a potential meeting between President Donald Trump and President Xi Jinping at the APEC summit in South Korea. Led by U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, the talks focused on agricultural trade, rare earth export controls, and semiconductor tariffs-key flashpoints in the two nations' complex relationship. The negotiations, held on the sidelines of the ASEAN Summit, underscored both sides' desire to avoid further escalation as a temporary trade truce expires on November 10, according to a ukragroconsult report.

Agricultural trade remains a critical sticking point. U.S. soybean imports to China plummeted to zero tons in September 2025, marking the first such drop since November 2018, due to mutual tariffs and Beijing's shift to suppliers like Brazil and Argentina. China's total soybean imports hit 12.87 million tons in September, the second-highest on record, but U.S. farmers have suffered significant losses. Trump has framed the soybean issue as a Chinese negotiation tactic, while Beijing emphasizes the need to reduce trade barriers, the ukragroconsult report adds.

The talks also addressed China's recent restrictions on rare earth exports, which Washington argues threaten global supply chains for technology and defense sectors. In response, the U.S. launched a Section 301 investigation into China's compliance with the 2020 Phase One trade agreement, alleging Beijing failed to meet commitments on market access and purchase targets for U.S. goods. The Trump administration has threatened retaliatory measures, including a 100% tariff on Chinese goods, should disputes escalate, according to an Investing.com report.

Malaysia's role as a neutral venue highlighted its growing diplomatic influence in mediating U.S.-China relations. Prime Minister Anwar Ibrahim emphasized the country's commitment to fostering dialogue, while U.S. officials acknowledged Kuala Lumpur's strategic value in stabilizing trade ties. The city's semiconductor manufacturing infrastructure further reinforced its relevance, as both nations seek to secure supply chains for electric vehicles and consumer electronics, as noted in a Cryptorank report.

By the second day of talks, U.S. Trade Representative Jamieson Greer indicated progress toward a "productive meeting" between Trump and Xi, with discussions spanning soybean purchases, Taiwan, and Hong Kong. However, Beijing has not yet confirmed the leaders' meeting, and unresolved issues-such as China's detention of Hong Kong media tycoon Jimmy Lai-loom large. A tentative agreement could pave the way for a trade truce extension, but analysts caution that any deal remains fragile amid deep-seated geopolitical rivalries, according to Republic World.

The consultations come amid broader U.S. efforts to counter China's trade practices, including the American Primary Aluminum Association's support for the Section 301 probe. Industry groups argue China's noncompliance with the Phase One agreement has harmed domestic manufacturing, urging stricter enforcement of trade rules, according to a Morningstar press release.

Failure to resolve these disputes risks a trade war escalation, with global economic repercussions. Conversely, a compromise could inject billions into U.S. agriculture and stabilize food markets, as noted by Fortune. The outcome of the Kuala Lumpur talks will likely shape the trajectory of U.S.-China relations in the coming months, with implications far beyond bilateral trade, the ukragroconsult report concluded.

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