China Hails ‘Hard-Won’ Results on Trade Before Trump-Xi Summit

The Chinese Communist Party’s official mouthpiece called on the world’s biggest economies to “jointly safeguard hard-won achievements” from their latest trade talks, ahead of a high-stakes meeting between Donald Trump and Xi Jinping.

Trade negotiators from China and the US announced Sunday that they’d struck a slew of agreements on issues spanning tariffs, shipping fees, fentanyl and export controls over two days in Malaysia. That marked a significant cooling of tensions, after a recent volley of tariff threats and fresh export curbs threatened to derail the bilateral relationship.

Striking a conciliatory tone, the People’s Daily said Monday the progress showed Beijing and Washington were capable of handling their differences. “Neither side was blindsided by these issues, instead they focused on solving the problems,” according to the commentary penned by Zhong Sheng, a Chinese homonym for “Voice of China” that’s often used to set out Beijing’s foreign policy views.

Bloomberg's Tyler Kendall reports.

The Hang Seng China Enterprises Index rose as much as 1.3% on Monday, while the broader MSCI AC Asia Pacific Index advanced 1.5% to a new intraday record. China’s 10-year government bond yields edged up, as demand for safety assets ebbed following the positive results of trade talks.

Xi and Trump are expected to sign off on the terms this week in South Korea when they sit down in person for the first time since the US president returned to power. That meeting could reveal details around issues such as China’s purchases of US soybeans, Washington’s plans for shipping fees on Chinese vessels and Beijing’s rare earth export controls.

Trump on Monday suggested that he may drop an investigation into whether China violated the terms of his first-term trade deal based on his upcoming talks with Xi.

“If it all works out well, I’m sure they’ll be able to talk us out of it,” Trump said on Monday aboard Air Force One. “I have a feeling they’ll talk us out of it.”

“We expect the leaders to approve the deal, but whether it will bring lasting relief to markets is less clear — the new reality for US-China ties appears to be one of frequent ruptures and short-term fixes,” Chang Shu, David Qu and Jennifer Welch of Bloomberg Economics wrote in a note.

From Beijing’s perspective, fewer external uncertainties will buy policymakers’ time to focus on supporting the domestic economy and enhancing its tech sufficiency, they added. While Chinese industrial companies saw their earnings surge the most in nearly two years last month, the job market remains gloomy and a years long housing crash is lingering.

The People’s Daily commentary called on the US to stick to the trade and economic consultation mechanism led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. Export curbs announced by US officials outside that framework have derailed the system several times in recent months, prompting Beijing to jam its rare earth supply chain that’s critical to American manufacturing.

Bessent said he believed China would delay its latest rare-earth restrictions “for a year while they reexamine it” after the latest talks. It had been unclear how Beijing would enforce its proposed curbs asserting control over any global shipment containing even a trace of certain rare metals from China, a move that had sparked outcry in Europe, too.

Another potential area for a quick win is the 20% fentanyl tariff the US has imposed on Beijing to pressure authorities into halting the flow of precursor chemicals used to make the deadly drug. Relief on that levy — which stacks on top of Liberation Day tariffs — could be a boon for the Asian nation at a time when domestic demand is weak.

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