Spotlight On US-China Trade Talks As Trump Kicks Off Asia Trip: Can Trump-Xi Upcoming Meet Avert Tariff War?

US President Donald Trump arrived in Malaysia on Sunday (October 26, 2025) on the first leg of an Asian tour that will include high-stakes trade talks with Chinese counterpart Xi Jinping. Trump’s visit comes after he announced an additional 100% tariff on the dragon nation, thereby escalating the tariff war in Asia.

Top economic negotiators from the United States and China held high-stakes talks in Kuala Lumpur on trade, who described them as “very constructive”. The second day of US-China trade talks concluded in the Malaysian capital on Sunday, ahead of Trump’s highly anticipated meeting with Xi in South Korea later this week.

US-China trade discussions come amid mounting tensions, with Washington threatening 100% tariffs on Chinese goods starting November 1, 2025 and Beijing tightening export controls on rare earth magnets and minerals, which are critical components in global manufacturing and defence supply chains.

US-China tariff tensions: What sparked them?

The fragile truce painstakingly built since May by US Treasury Secretary Scott Bessent, Trade Representative Jamieson Greer, and China’s Vice Premier He Lifeng has begun to unravel. After the US expanded its export blacklist to thousands of additional Chinese firms in September, Beijing retaliated with sweeping controls on rare earth exports in October.

The latest escalation threatens to push both sides back to triple-digit tariffs, at levels which are unseen since the peak of the 2018–2020 trade war.

What’s at stake in the Kuala Lumpur talks?

The weekend dialogue, held at Merdeka 118, the world’s second-tallest building, is expected to determine whether US President Trump and Chinese President Jinping will meet next week at the Asia-Pacific Economic Cooperation (APEC) summit in South Korea.

The key agenda includes potential relief on tariffs, discussions on US technology export curbs, and the resumption of Chinese purchases of US soybeans, a politically sensitive issue for Trump ahead of the 2025 election season.

Trump looking to link trade with global strategy?

Before departing Washington for his five-day Asia tour, Trump said the Xi meeting would also cover Taiwan, Russia, and the release of Hong Kong media tycoon Jimmy Lai, whose imprisonment has become symbolic of China’s tightening political control. On board Air Force One, he added that the US expects Beijing to play a “helpful role” in managing Russia.

News agency quoted analysts as saying that the talks are critical in determining whether the current tariff truce can survive. “They need to first mitigate their dispute over US technology export curbs and China’s rare earth controls,” said Josh Lipsky of the Atlantic Council. “I’m not sure the Chinese can agree — it’s their primary leverage.”

According to Scott Kennedy of the Center for Strategic and International Studies, the Trump-Xi meeting will be decisive. “If they make a deal, their gambit pays off. If not, everyone should prepare for things to get much nastier.”

Rare Earth battle: Will it redefine global supply chain?

The US accuses China of a “global supply chain power grab”, claiming that Beijing’s restrictions on rare earth exports are designed to choke Western access to critical materials used in electric vehicles, semiconductors, and weapons systems. This is one of the reasons why Trump had declared a 100% tariff on Chinese goods.

In response, Washington is exploring a new round of technology export curbs, potentially affecting software-powered goods from laptops to jet engines.

US-China tariff truce still possible?

Despite the friction, both sides have incentives to avoid an economic rupture. The US Treasury insists that talks were “very constructive”.

China’s top trade negotiator Li Chenggang described the trade negotiations as candid and comprehensive. The two sides discussed tariffs, export controls and fentanyl, whose trafficking Trump has sought harsh measures against. Li added that they also talked about solutions to ongoing trade challenges.

If successful, the Kuala Lumpur talks could pave the way for a temporary reset in US-China relations ahead of the Trump–Xi meeting. A failure, however, could unleash a fresh wave of tariffs and trade restrictions.