In a major breakthrough that could reshape global trade dynamics, the United States and China have reached the framework of a new trade deal ahead of the much-anticipated meeting between President Donald Trump and Chinese President Xi Jinping in South Korea later this week.

US Treasury Secretary Scott Bessent confirmed that the framework includes Agreements on key flashpoints such as TikTok’s US operations, rare earth mineral exports, and agricultural trade. The development marks a crucial step toward stabilizing economic relations between the world’s two largest economies after years of tariffs, sanctions, and political friction.

Bessent told CBS News that both sides have “reached a substantial framework for the two leaders,” adding that the proposed tariffs would be averted if the agreement is finalized during the Trump–Xi meeting. “The tariffs will be averted,” he said, signaling that the long-feared 100% tariff on Chinese goods might not come into effect.

The announcement follows a series of high-level negotiations between Bessent and senior Chinese trade officials on the sidelines of the Association of Southeast Asian Nations (ASEAN) summit in Malaysia. Both parties described the talks as “constructive,” indicating a willingness to de-escalate the trade war that has disrupted global supply chains and strained economic ties for years.

TikTok Deal and Tech Tensions

One of the standout issues addressed in the framework involves the video-sharing giant TikTok. Bessent confirmed that an agreement has been reached concerning the platform’s US arm, which Trump and Xi are expected to finalize in person. The deal reportedly allows US companies to oversee TikTok’s algorithm and appoint six of the seven board members for its US operations — effectively giving American entities control over the app’s data governance.

The US government has long cited national security concerns over TikTok’s Chinese parent company, ByteDance, alleging that the platform could expose sensitive user data to Beijing. Trump had previously demanded TikTok’s sale or risk a nationwide ban, a threat he postponed multiple times to allow for negotiation.

Now, with this new framework in place, a full divestiture appears unnecessary, and analysts suggest the move reflects a more pragmatic approach from both leaders. For Trump, who used TikTok as part of his outreach during his 2024 presidential campaign, the deal could be a symbolic victory in balancing national security and youth engagement.

Rare Earth Minerals: China Backs Down

Another key element of the emerging deal centers around China’s control of rare earth minerals — materials vital to the production of smartphones, electric vehicles, and renewable energy technologies. China currently processes nearly 90% of the world’s rare earths, giving it significant leverage in global supply chains.

Earlier this month, Trump had threatened a 100% tariff on Chinese imports following Beijing’s announcement of stricter export controls on rare earths. However, Bessent said China has now agreed to defer the new restrictions for at least a year while re-examining its policy.

This temporary reprieve offers relief to US manufacturers who rely on the materials for electronics and green technology production. The move also demonstrates that both countries are eager to avoid another escalation that could disrupt industries worldwide.

Boost for US Farmers

Agriculture — another central issue in the trade dispute — also saw progress. China, the world’s largest buyer of soybeans, had halted orders from US farmers amid the trade tensions. This boycott severely affected America’s agricultural sector, especially in the Midwest.

“I’m actually a soybean farmer, so I’ve felt this pain too,” Bessent said during an interview on ABC’s This Week. “I think we have addressed the farmers’ concerns.”

He added that the forthcoming announcement of the deal would bring “good news” to soybean producers, with expectations that China will resume large-scale purchases. The restoration of agricultural exports could provide a significant economic boost to US farming communities that have endured years of uncertainty.

Regional Agreements Strengthen US Position

Alongside the China negotiations, the United States signed several new trade agreements with Malaysia, Cambodia, Thailand, and Vietnam. These deals aim to diversify American access to critical minerals and reduce dependence on Chinese supply chains.

In Malaysia, Trump announced agreements to expand US trade in rare earth elements, while Vietnam committed to purchasing Boeing jets worth more than $8 billion and increasing imports of American agricultural goods. “Our message to the nations of Southeast Asia is that the United States is with you 100% and we intend to be a strong partner for many generations,” Trump said during a press conference.

Analysts say these agreements not only strengthen the US’s geopolitical position in Asia but also demonstrate a broader strategy to counterbalance China’s influence in the region.

A Turning Point in US–China Relations?

While both sides have stopped short of declaring a final trade deal, the framework marks a significant thaw in relations that were previously characterized by mutual suspicion and retaliatory tariffs. The two leaders’ upcoming summit in South Korea could determine whether this framework becomes a lasting agreement or another temporary truce.

If finalized, the deal could signal the beginning of a new chapter in global trade — one emphasizing collaboration over confrontation. However, skeptics warn that both Trump and Xi face domestic pressures that could complicate implementation.

Still, the latest progress has been met with cautious optimism by markets, businesses, and governments worldwide. For now, both Washington and Beijing appear ready to trade confrontation for cooperation — at least for the moment.