U.S. Treasury Secretary Scott Bessent is set to meet Chinese Vice Premier He Lifeng in Malaysia next week in an effort to defuse tensions over Washington’s planned 100% tariff hike on Chinese imports. The high-level meeting comes amid renewed strain between the world’s two largest economies after China imposed export restrictions on rare-earth minerals critical to U.S. industries.

According to reports, the talks are aimed at preventing a full-blown trade confrontation before the new tariffs take effect on November 1. Both sides have recently signaled a willingness to resume dialogue following a video call earlier this month, in which they discussed stabilizing economic relations and avoiding further escalation.

The U.S. has accused China of using rare-earth controls as a political weapon, while Beijing insists the measures are necessary for national security. Analysts warn that a 100% tariff on Chinese goods could severely disrupt global supply chains, particularly in the technology, automotive, and defense sectors.

Markets responded positively to news of the planned meeting, with Asian stocks gaining slightly as investors bet on a potential diplomatic breakthrough. A successful outcome could pave the way for a Trump-Xi summit later this month, where broader trade and investment issues are expected to be discussed.

Both governments remain cautious but optimistic that dialogue in Malaysia could ease tensions, delay the tariff rollout, and re-establish a framework for managing future disputes between the two economic powers.

Source: Reuters.