Trump’s 100% tariff threat looms as US, China seek a trade-war ceasefire in Kuala Lumpur talks

Top US and Chinese economic officials are set to meet in Kuala Lumpur on Saturday in a last-ditch effort to prevent their trade war from intensifying and to pave the way for a meeting between US President Donald Trump and Chinese President Xi Jinping next week.

The talks, taking place on the sidelines of the ASEAN summit, come days after Trump threatened to impose 100% tariffs on Chinese goods starting November 1 in retaliation for Beijing’s expanded export controls on rare earth magnets and minerals.

According to Reuters, the recent moves have derailed months of careful diplomacy led by US Treasury Secretary Scott Bessent, US Trade Representative Jamieson Greer, and Chinese Vice Premier He Lifeng, who have held four previous rounds of talks since May. Saturday’s session aims to restore enough progress for Trump and Xi to meet at the Asia-Pacific Economic Cooperation (APEC) summit in South Korea next Thursday.

A fragile truce on the line

Analysts warn that both sides must first find common ground on rare earths and technology export controls to make the meeting possible.

“The meeting can’t happen without an agreement that they can return to this intermediate ceasefire that we’ve had over the summer,” said Josh Lipsky, international economics chair at the Atlantic Council.

“The US wants to reverse and end China’s new rare earths controls,” he said. “I’m not sure the Chinese can agree to that — it’s the primary leverage that they have.”

Details of the Kuala Lumpur session remain tightly guarded, with officials from both countries declining to confirm the venue until Chinese delegates began arriving at Merdeka 118, the world’s second-tallest building.

Trump is expected to arrive in Malaysia on Sunday. “We won’t know if Beijing has successfully counterbalanced the US’s export controls with restrictions of their own or if they’ve induced a continuation of an escalatory spiral until Trump and Xi meet,” said Scott Kennedy, a China economics expert at the Center for Strategic and International Studies (CSIS).

“If they make a deal, their gambit will have paid off. If there’s no deal, then everyone will need to prepare for things to get much nastier.”

Rare earths at the heart of the standoff

The world’s two largest economies are trying to prevent tariffs from returning to triple-digit levels, a crisis that first erupted in April when Trump imposed sweeping global tariffs and China retaliated by cutting off rare earth supplies to US buyers.

Their first meeting in Geneva in May produced a 90-day truce, reducing tariffs to roughly 55% on the US side and 30% on China’s, and restoring some magnet exports. The agreement was extended in London and Stockholm, but tensions spiked again in September when the US Commerce Department broadened its export blacklist to cover thousands of Chinese firms.

China countered on October 10 by requiring export licenses for all products and technologies related to rare earths, citing national security. Bessent and Greer condemned the move as a “global supply chain power grab,” warning that the US and its allies “will not accept the restrictions.”

The Trump administration has since announced a new tariff investigation into what it called China’s “apparent failure” to uphold the 2020 Phase One trade agreement, under which Beijing had pledged to boost imports of US farm goods, energy, and services. China bought no American soybeans in September, intensifying the pressure on Trump’s farm-state supporters ahead of next year’s election.

(WIth inputs from Reuters)