[Photo Credit: Reuters]

Top economic officials from the U.S. and China are due to arrive in Kuala Lumpur on Friday for talks to prevent a trade war escalation and keep next week’s meeting between U.S. President Donald Trump and Chinese President Xi Jinping on track.

U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer will meet with Chinese Vice Premier He Lifeng to find a way forward after Trump threatened new 100% tariffs on Chinese goods and other trade curbs starting November 1 in retaliation for China’s vastly expanded export controls on rare earth magnets and minerals.

The talks, due to start on Saturday on the sidelines of the Association of Southeast Asian Nations Summit in the Malaysian capital, are the fifth meeting between He, Bessent and Greer since May, shifting from European cities to a key Asian exporter dependent on both China and the U.S.

The talks are again focused on China’s stranglehold over global supplies of rare earth minerals and magnets essential for high-tech manufacturing, which Beijing has used as an effective leverage point against Washington.

In April, Trump hit Chinese imports with new tariffs that quickly escalated to triple-digit rates on both sides, and Beijing cut off rare earths supplies to U.S. buyers, a move that threatened to halt U.S. production of electric vehicles, semiconductors and weapons systems.

Bessent and Greer’s first meeting with He in Geneva in May led to a 90-day truce, which brought down tariffs sharply to about 55% on the U.S. side and 10% on the Chinese side and restarted the flow of magnets. The terms were refined in London and Stockholm and September talks in Madrid produced a deal to transfer Chinese short video app TikTok to U.S. ownership control.

But the delicate truce frayed two weeks later, when the U.S. Commerce Department vastly expanded a U.S. export blacklist to automatically include firms more than 50% owned by companies already on the list, banning U.S. exports to thousands more Chinese firms.

China struck back with the new global rare earth export controls on October 10, aiming to prevent their use in military systems by requiring export licenses for products using Chinese rare earths or rare earth refining, extraction or processing technology developed by Chinese firms.

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