Post by : Badri Ariffin

Kuala Lumpur, Malaysia – Hopes of easing tensions between the world’s two largest economies surged as the United States and China concluded high-level trade discussions in Malaysia over the weekend. Officials on both sides described the negotiations as productive, paving the way for a potential agreement when President Donald Trump and Chinese President Xi Jinping meet later this week in South Korea.

The discussions, held on the sidelines of the ASEAN summit, focused on key sticking points, including tariffs, rare-earth export controls, and large-scale agricultural purchases. US Treasury Secretary Scott Bessent said negotiators had established a “framework” for the leaders to finalize, while China’s Vice Premier He Lifeng noted a “basic consensus” had been reached to address mutual concerns.

Asian stock markets reacted swiftly to the news, reflecting optimism about a de-escalation in trade tensions. Japan’s Nikkei 225 climbed more than 2%, South Korea’s KOSPI surged 2.3%, and Hong Kong’s Hang Seng rose by 0.85% early Monday, signaling renewed investor confidence.

The urgency for a breakthrough comes after a recent escalation in tensions. China had announced plans to require export licenses for rare-earth magnets and semiconductor materials containing Chinese minerals, raising concerns about global supply chain disruptions. In response, Trump threatened a 100% tariff on Chinese imports, intensifying fears of a prolonged trade war.

Both sides are now set to finalize specifics in their domestic approval processes, with key details expected to be discussed during the Trump-Xi summit in Gyeongju, South Korea. Analysts highlight that any successful agreement could stabilize markets and mitigate risks to the global economy, particularly in technology and agriculture sectors.

Investors and industry leaders remain watchful as the world awaits the outcome of the summit, hoping the two economic giants can prevent a protracted trade conflict that would have far-reaching consequences worldwide.

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