U.S. Treasury Secretary Scott Bessent announced that a significant framework for trade negotiations between the United States and China has been established. This development comes ahead of a scheduled meeting between President Donald Trump and Chinese President Xi Jinping in South Korea on Thursday. The agreement aims to prevent the imposition of 100 percent tariffs on Chinese imports, which had been threatened by the U.S. in response to China's export controls on rare earth minerals.

"I think we've reached a substantial framework for the two leaders who will meet in Korea next Thursday," Bessent stated during an interview. He emphasized that the leverage provided by Trump's tariff threat played a crucial role in these negotiations. "The president had given me maximum leverage when he threatened 100% tariffs if the Chinese imposed their rare earth global export controls, so I think we have averted that," he added.

Bessent also addressed China's potential export controls on rare earth minerals, which are vital for various industries. He expressed optimism that China would delay these controls for a year while they reassess their strategy.

In addition to rare earths, Bessent mentioned the possibility of a deal regarding American soybeans. China has halted purchases of U.S. soybeans amid the ongoing trade conflict. According to the American Soybean Association, China accounted for over 50% of U.S. soybean exports in 2023 and 2024. Bessent remarked, "I believe, when the announcement of the deal with China is made public, that our soybean farmers will feel very good about what's going on, both for this season and the coming seasons, for several years."

The Treasury Secretary also commented on the ongoing government shutdown, which is now the second-longest in U.S. history. When asked about the possibility of renewing negotiations with Democrats, Bessent expressed skepticism. "Well, what good does it do, Martha? They dug in," he said, referring to Democratic lawmakers advocating for an extension of pandemic-era health care subsidies. He noted that 52 Republican senators have voted multiple times to reopen the government, while only a few moderate Democrats have crossed party lines.

As the trade discussions progress, the upcoming meeting between Trump and Xi is expected to cover a range of topics, including trade balance, agricultural purchases, and efforts to address the U.S. fentanyl crisis. Bessent's comments reflect a cautious optimism about the potential for a more cooperative trade relationship between the two nations.