US and China hold negotiations to avoid trade war escalation

Top economic officials from the US and China ended their first day of talks in Kuala Lumpur on Saturday, with a Treasury spokesperson describing them as “very constructive”.

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The world’s two largest economies are looking to avert an escalation of their trade war and ensure that a meeting happens next week between US President Donald Trump and Chinese President Xi Jinping.

The talks on the sidelines of the Association of Southeast Asian Nations summit will chart a path forward after Trump threatened new IOO percent tariffs on Chinese goods and other trade curbs starting on November |, in retaliation for China’s vastly expanded export controls on rare earth magnets and minerals.

The recent actions, which also include an expanded US export blacklist that covers thousands more Chinese firms, have disrupted a delicate trade truce crafted by US Treasury Secretary Scott Bessent, US Trade Representative Jamieson Greer and Chinese Vice Premier He Lifeng over four previous meetings since May.

He smiled and waved to reporters but did not comment as the Chinese delegation left the venue for the talks, Kuala Lumpur's Merdeka 118 tower, the second-tallest building in the world.

China's top trade negotiator Li Chenggang is also participating in the talks. A Reuters witness saw Li arriving alongside He earlier in the day, About the talks, a Treasury spokesperson said: “They have been very constructive, and we expect them to resume in the morning”.