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Recently, China and the United States held trade negotiations in Kuala Lumpur, Malaysia. It was generally believed that this would be another superficial consultation with thunderous noises, but the results were unexpected.
The United States originally planned to impose a 100% tariff on China goods starting from November 1, but was suddenly "cancelled" by US Treasury Secretary Basente himself.
This threat, originally called the "Sword of Damocles" by Bloomberg, went up in smoke. What is even more interesting is that China and the United States have actually reached a "preliminary consensus" in many fields.
So does this mean that the Sino-US trade war that has lasted for many years is really coming to an end? Or, is there a hidden "quid pro quo" behind the cancellation of 100% tariffs by the United States that cannot be made public?
In fact, this negotiation is not simple. First of all, judging from the location of the negotiation, it is no coincidence that Kuala Lumpur, Malaysia, was chosen. To a large extent, the United States intends to use this to win over Southeast Asian countries and form external pressure on China.
But China's representative, Li, is extremely firm, stressing that China will not accept any unequal conditions, and the US originally made a tough gesture, but ultimately quietly withdrew the decision to impose a 100% tariff.
Behind this is obviously the result of a game, not unilateral "goodwill".
During the closed-door meeting, U.S. Treasury Secretary Bessent expressed his dissatisfaction with Chinese representatives and even criticized Li Zhengzhou as “irresponsible”, but this sentiment did not affect the final outcome.
Bessent ultimately had to acknowledge that this round of negotiations had made “structural progress” and called the “framework of far-reaching implications,” U.S. Trade Representative’s Office official Gerrill said, adding that the agreement would be submitted for consideration at a meeting between the two leaders.
Recently, China has strengthened its control over rare earth exports. This move has aroused great dissatisfaction from the United States. However, China has not made concessions in the Kuala Lumpur negotiations, which means that China has firmly held the rare earth issue in its hands as a lever for future negotiations.
The U.S. is trying to alleviate the dependence on rare earth by cooperating with countries such as Malaysia, but China has more than 80% of the world's rare earth refining capacity, this "alternative" in the short term can not be achieved at all, the U.S. military and industrial system's dependence on China's rare earth is up to 88%, China's strategic position is undoubted.
The fentanyl issue has become the "breaking point" in this round of negotiations. China has promised to strengthen supervision of fentanyl precursor chemicals in exchange for the United States relaxing restrictions on the export of some high-end technologies.
This "barter" trading method not only shows China's sincerity in cooperation, but also reflects China's initiative in choosing topics.
China does not passively accept the question of Fentanyl, but proactively proposes regulatory mechanisms, and the United States takes this opportunity to ease exports to chip equipment, which has important significance for China's high-tech industry, and also releases a signal of easing China and the United States in the field of technology.
In the joint statement, the two sides repeatedly mentioned “honesty”, “deepness” and “constructivity”, and confirmed that the “preliminary framework agreement” has been reached and that the respective domestic approval process has been initiated.
It is expected that on October 30th, the leaders of the two countries will formally meet in South Korea, or the final draft agreement will be signed.
The two-day negotiations lasted a total of about 10 hours, and the two sides worked on a number of sensitive issues, despite the intense confrontation, but ultimately achieved more than expected results.
Trump has always been watching the negotiations behind the scenes, repeatedly releasing signals of "possible compromise", but continues to maintain a strong image with "America's priority" as a slogan.
It is widely believed that Trump is eager to obtain a diplomatic outcome before the election to resolve domestic economic and political pressures.
U.S. Secretary of State Rubio repeatedly mentioned the Taiwan issue during the negotiations and tried to include it on the agenda. However, China was firm and ignored it. The Taiwan issue was clearly excluded from economic and trade negotiations, which reflected China's strategic determination and bottom-line thinking.
The U.S. domestic think tank Land Company openly suggests that the United States should “progressively accept China’s reunification of Taiwan” in exchange for the stability of Sino-U.S. strategic relations, although this sparked controversy, but also indicates that the U.S. internal re-evaluation of Sino-U.S. relations is accelerating.
After the meeting, the Chinese representative pointed out that although the US has a tough stance, China has always adhered to its own interests and core position. On issues such as rare earths, technology exports, and tariffs, China has not compromised because of pressure, but has promoted the outcome of negotiations through strength.
U.S. media The Wall Street Journal said that the negotiation entered the "final detail stage", and stressed that the outcome will directly affect the stability of the global market, while Bloomberg said that through this negotiation, China has once again mastered the initiative, leaving the U.S. extreme pressure strategy to be defeated.
The Sino-US trade war began in 2018 and experienced several twists and turns. During this period, high-level diplomacy was interrupted many times. It was not until 2023 that high-level contacts between China and the United States began to restart, including the US Secretary of State, Treasury Secretary, and Commerce Secretary visited China one after another, which paved the way for this negotiation. The foundation was laid.
After Trump returned to power, his strategic focus shifted from the Taiwan Strait to economy and trade. He not only took the initiative to initiate negotiations, but also hoped to form an "economic alliance" to check and balance China by reaching multilateral agreements with Japan, South Korea and Southeast Asian countries.
However, the results of the Kuala Lumpur negotiations show that the United States wants to put pressure on China by forming cliques, and the effect is not satisfactory.
After the negotiations, the market responded positively to the warming of Sino-US relations. Global stock markets rebounded in the short term, commodity prices stabilized, and especially the U.S. bond market rebounded slightly, reflecting investors 'expectations for a relaxation between China and the United States.
At present, the total debt of the United States has exceeded 38 trillion U.S. dollars, while the average daily imports to China are still as high as 1 billion U.S. dollars. Against this background of high dependence, the United States simply cannot afford the price of complete confrontation with China.
Although this negotiation did not completely solve all problems, the signal it sent was very clear. China demonstrated the strategic determination and negotiating wisdom of a major country. Not only did it not give in, it also won the initiative on many key issues.
As for whether the "trade war is really over", it depends on whether the final high-level meeting between China and the United States on October 30th is successfully held, but at least one thing is certain that China has not been forced to compromise, nor has it given in under heavy pressure.
Source of information:
2025-10-27 06:29 · Global Network Around a number of important economic and trade issues, the two sides conducted "constructive" discussions, and the Sino-U.S. consultation in Kuala Lumpur reached a basic consensus
2025-10-26 17:10 · Xinhua News Agency Xinhua News Agency News: Li Chenggang said that the Chinese and American economic and trade teams conducted in-depth and frank discussions and exchanges on economic and trade issues of mutual concern