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US and Chinese officials kicked off high-stakes trade talks in Malaysia on Saturday as Donald Trump headed to Asia for a summit with Xi Jinping after weeks of mounting tensions between the world’s biggest economies.
US Treasury secretary Scott Bessent and Chinese vice-premier He Lifeng are holding negotiations in Kuala Lumpur that will help shape the outcome of the summit on Thursday.
This month Beijing announced sweeping export controls on rare earths, prompting Trump to threaten an extra 100 per cent tariff on Chinese imports from November 1 and raising the risk of a return to a full-blown trade war.
The talks take place a day after the US trade representative’s office launched a probe that could lead to further duties on Chinese imports.
Trump is heading to Malaysia to meet south-east Asian leaders on the first leg of a week-long Asia trip that includes stops in Japan and South Korea, where he will meet Xi.
“We have a lot to talk about with President Xi, and he has a lot to talk about with us. I think we’ll have a good meeting,” Trump said on Friday as he departed the US.
Beijing has defended the restrictions on rare earths, which are vital to the manufacture of fighter jets, electric vehicles and smartphones, by accusing Washington of putting Chinese companies on an export blacklist.
While Trump has expressed optimism about the outcome of the summit with Xi, several people familiar with the matter said Beijing appeared reluctant to roll back the planned export controls, which US officials have criticised as disproportionate.
The spectre of a trade war between the US and China has loomed over the global economy since April, when the White House hit Beijing with 145 per cent tariffs and Xi retaliated by slapping 125 per cent levies on US exports.
Washington and Beijing subsequently reached a truce to pause the duties that in August was extended to November 10. Both sides have accused the other of violating the spirit of negotiations.
After meeting south-east Asian leaders in Malaysia on Sunday, Trump will fly to Japan to meet Sanae Takaichi, Japan’s new prime minister.
Takaichi, the new Japanese prime minister, announced an acceleration of Tokyo’s defence spending that analysts said would give her scope to pledge further expansion of the military budget during Trump’s visit.
Speaking at the Mount Fuji Dialogue forum in Tokyo on Saturday, US ambassador to Japan George Glass said Trump was visiting Japan “at a time of rising tensions in the region”.
“This is a very tough neighbourhood,” Glass said. “The US-Japan alliance and our partners face determined and dangerous adversaries, adversaries that will do whatever it takes to undermine our alliance and weaken our regional partnerships.”
