The U.S. and China have reached what Treasury Secretary Scott Bessent calls a “done deal” covering rare earths, AI, fentanyl, and tariffs. He confirmed the breakthrough on Sunday after back-to-back talks in Malaysia with China’s top negotiators.
“China was ready to make a deal after two days of negotiations,” Scott told NBC’s Meet the Press. The talks were aimed at stopping Trump’s proposed 100% tariff hike on Chinese goods set for November 1.
Scott said both sides now have a working “framework” for President Trump and Xi Jinping to meet in person later this week. If the deal holds, the tariff threat gets pulled off the table, and discussions over AI technology and companies like Nvidia, Nexperia, Tesla will begin.
“President Trump gave me a great deal of negotiating leverage with the threat of the 100% tariffs,” Scott said. “I believe we’ve reached a very substantial framework that will avoid that and allow us to discuss many other things with the Chinese.”
When asked if that included Nvidia specifically, Scott said, “Of course!”
China signals pause on rare earth export limits
China’s dominance in rare earth minerals, which are used in everything from smartphones to fighter jets, had triggered fresh tensions after Beijing hinted at restricting exports. That’s now paused. “I’m also anticipating that we will get some kind of a deferral on the rare earth export controls that the Chinese had discussed,” Scott told NBC.
Beijing currently controls nearly the entire global supply chain for rare earths, and the U.S. has been scrambling for alternatives.
Trump touched down in Malaysia on Sunday for a summit with Southeast Asian leaders. It’s the first stop in a packed five-day Asia tour. But the real showdown is expected Thursday, when Trump meets Xi in South Korea.
According to Scott, “We’ve agreed to meet. We’re going to meet them later in China, and we’re going to meet in the U.S., in either Washington or at Mar-a-Lago.” Trump also plans to visit Xi in Beijing early next year ahead of Lunar New Year on February 17. A Washington D.C. meeting may also happen before Xi’s G20 visit in the fall.
Trade wasn’t the only topic on the table. Trump plans to confront Xi over fentanyl when they meet in South Korea. Washington blames China for flooding U.S. streets with precursor chemicals that fuel the deadly opioid epidemic.
Beijing has rejected that accusation, claiming America’s addiction crisis is driven by its own internal demand.
Agriculture and AI included in broader deal
On top of rare earths and fentanyl, the two sides discussed agriculture, AI, and broader trade flows. Scott hinted at possible large-scale Chinese soybean and farm product purchases, saying, “I think we are going to be able to discuss substantial soybean and agriculture purchases for our American farmers.”
The final round of talks happened over the weekend in Malaysia between Chinese Vice Premier He Lifeng, trade minister Li Chenggang, Scott, and U.S. Trade Representative Jamieson Greer.
After the meetings, Li confirmed a preliminary consensus was reached on keeping the trade truce alive and moving forward on fentanyl and export controls.
Trump told reporters after the meetings, “I think we’re going to have a deal with China.” He didn’t give a date but confirmed meetings with Xi are happening in both countries soon.
Scott has now used the word “framework” three times in public since the talks ended, and called the agreement “very substantial.”
It’s unclear how long it holds, but for now, the tariffs are off, the rare earths stay flowing, and both leaders are boarding planes.
Scott is expected to stay in Asia through the week, with more side meetings lined up before the Trump-Xi summit. He’s also been pushing discussions on AI cooperation, though no further details were released.
Join a premium crypto trading community free for 30 days – normally $100/mo.
