Major Breakthrough in US-China Trade Relations
In a significant diplomatic breakthrough, US Treasury Secretary Scott Bessent announced on October 26, 2025, that the United States and China have reached a comprehensive trade framework agreement that effectively averts threatened 100% tariffs on Chinese goods and resolves key disputes including TikTok ownership and rare earth minerals access. The announcement came during Bessent's appearance on Face the Nation with Margaret Brennan from Kuala Lumpur, Malaysia, where he was traveling with President Donald Trump.
Tariff Threat Removed, Rare Earths Access Secured
The agreement removes the immediate threat of additional 100% tariffs on Chinese imports that President Trump had threatened to implement on November 1. 'I believe that that is effectively off the table,' Bessent stated during the interview. The deal also includes China delaying implementation of its threatened rare earth minerals and magnets licensing regime by one year while the policy is reconsidered. This is particularly significant given that China controls approximately 90% of global rare earth supply, which are essential components in electronics, automobiles, and defense systems.
TikTok Deal Finalized, Algorithm Control Transferred
In a major development for technology and national security, Bessent confirmed that a final deal has been reached on TikTok's US operations. 'We reached a final deal on TikTok. We reached one in Madrid, and I believe that as of today, all the details are ironed out,' he told Brennan. The agreement will see US companies gain control over TikTok's algorithm with Americans holding six of seven board seats, addressing longstanding national security concerns about the Chinese-owned social media platform. This follows months of negotiations mandated by a 2024 congressional bill requiring TikTok to sell about 80% of its US assets to American investors.
Agricultural Relief for American Farmers
The trade framework brings welcome relief to American soybean farmers who have been hit hard by China's boycott of US agricultural products. Bessent, who revealed he is also a soybean farmer, stated that 'the soybean farmers are going to be extremely happy with this deal for this year and for the coming years.' This represents a significant turnaround after China purchased no US soybeans in September, despite traditionally being the top export market for American agricultural products. The deal includes substantial Chinese purchases of US agricultural products for multiple years, providing much-needed stability for American farmers.
Government Shutdown Impacts Negotiations
Despite the international success, Bessent addressed concerns about how the ongoing US government shutdown might affect President Trump's negotiating position. 'I don't think it's going to hurt. It's a global embarrassment what these Democratic senators are doing, keeping the government shut down,' he commented. The shutdown, which began on October 1, has left approximately 750,000 federal workers furloughed without pay, while essential personnel like TSA officers and military members continue working without immediate compensation. Bessent warned that 'by November 15 our troops and service members who are willing to risk their lives aren't going to be able to get paid. What an embarrassment.'
Final Meeting Scheduled
President Trump and Chinese President Xi Jinping are scheduled to meet on Thursday, October 30, in South Korea to finalize the agreement details. This will be their first in-person meeting since Trump returned to office and represents a significant step toward de-escalating trade tensions between the world's two largest economies. The framework agreement extends the current tariff truce beyond its November 10 expiration date and marks what would be the second extension since the initial agreement in May.
Economic Implications
The deal comes at a critical time for both economies. While addressing inflation concerns, Bessent noted that 'we are on a glide path to lower inflation over the coming months,' pointing to recent declines in mortgage rates and rental costs. However, he distinguished between inflation and affordability, acknowledging that while prices may not necessarily decrease, the rate of increase is slowing. The agreement also maintains US export controls on semiconductor chips and restrictions on Chinese investment in the United States, preserving key national security protections while opening pathways for economic cooperation.