US and China say trade deal drawing closer as Trump and Xi prepare to meet

US president Donald Trump at the ASEAN summit in Kuala Lumpuron Sunday (Mark Schiefelbein/AP)

A trade deal between the United States and China is drawing closer, officials from the world’s two largest economies said on Sunday as they reached an initial consensus for US president Donald Trump and Chinese leader Xi Jinping to aim to finalise during their high-stakes meeting.

Any agreement would be a relief to international markets even it does not address underlying issues involving manufacturing imbalances and access to state-of-the-art computer chips.

Beijing recently limited exports of rare earth elements that are needed for advanced technologies, and Mr Trump responded by threatening additional tariffs on Chinese products.

The prospect of a widening conflict risked weakening economic growth worldwide.

Chinese President Xi Jinping (Xie Huanchi/Xinhua via AP)

China’s top trade negotiator, Li Chenggang, told reporters that the two sides had reached a “preliminary consensus”, while Mr Trump’s treasury secretary, Scott Bessent, said there was “a very successful framework”.

Mr Trump also expressed confidence that an agreement was at hand, saying the Chinese “want to make a deal and we want to make a deal”.

The Republican president is set to meet Mr Xi on Thursday in South Korea, the final stop of his trip through Asia. Mr Trump reiterated that he plans to visit China in the future and suggested that Mr Xi could come to Washington or Mar-a-Lago, Mr Trump’s private club in Florida.

Mr Bessent told CBS’s Face The Nation that the threat of additional higher tariffs on China was “effectively off the table”.

In interviews on several American news shows, he said discussions with China yielded initial agreements to stop the precursor chemicals for fentanyl from coming into the US, and that Beijing would make “substantial” purchases of soybean and other agricultural products while putting off export controls on rare earths.

The progress toward a potential agreement came during the annual summit of the Association of Southeast Asian Nations, in Kuala Lumpur, with Mr Trump seeking to burnish his reputation as an international dealmaker.

Yet his way of pursuing deals has meant serious disruptions at home and abroad. His import taxes have scrambled relationships with trading partners while a US government shutdown has him feuding with Democrats.