Economy

Can Malaysia Talks Ease China-US Trade Tensions Before Xi-Trump Summit?

China‘s He Lifeng to hold trade talks with US officials in Malaysia amid rising tensions.

byAndres Castro

October 23, 2025, 10:11 AM

A wide daytime skyline of Kuala Lumpur, Malaysia, featuring the Petronas Towers.

The Kuala Lumpur, Malaysia skyline featuring the Petronas Towers. By MDL.

Executive Summary

China’s Vice-Premier He Lifeng will hold trade talks with US officials in Malaysia from Friday to Monday.

These discussions, the fifth round between the two largest economies, aim to address critical bilateral economic issues and could precede an anticipated meeting between President Xi Jinping and President Trump.

The high-level talks occur amid heightened trade tensions, including President Trump’s warnings of potential 100 percent tariff hikes and China’s expansion of rare earth export controls in retaliation.

The Story So Far

The current trade talks, representing the fifth round of discussions between the US and China, are occurring amidst heightened bilateral trade tensions marked by a recent series of economic sanctions and export controls. These discussions are particularly critical as they follow President Trump’s warnings of potential 100 percent tariff hikes and China’s retaliatory expansion of rare earth export controls, aiming to address these issues and potentially pave the way for a summit between President Xi Jinping and President Donald Trump.

Why This Matters

The ongoing high-level trade talks between China and the US, occurring amidst heightened tensions over tariffs and export controls, are critical for de-escalating recent economic friction. The outcome of these discussions could set the stage for a potential summit between President Xi and President Donald Trump, directly impacting the stability of global trade relations.

Who Thinks What?

China, represented by Vice-Premier He Lifeng, is scheduled to hold trade talks to address critical issues in bilateral economic and trade relations, while also having expanded its export control regime for rare earth elements in retaliation to US sanctions.

The United States, through Secretary of the Treasury Scott Bessent, confirmed the planned meeting and characterized earlier discussions as “frank and detailed,” with President Donald Trump issuing warnings of potential 100 percent tariff hikes and the US broadening its Entity List with trade sanctions.

China’s Vice-Premier He Lifeng is scheduled to hold trade talks with US officials in Malaysia from Friday to Monday, the Ministry of Commerce announced on Thursday. These discussions are expected to address critical issues in bilateral economic and trade relations, potentially setting the stage for an anticipated meeting between President Xi Jinping and President Donald Trump in South Korea.

Trade Discussions Underway

The upcoming negotiation marks the fifth round of trade talks between the world’s two largest economies. Beijing stated the discussions align with a consensus reached during multiple phone calls between the two nations’ leaders this year.

US Secretary of the Treasury Scott Bessent previously confirmed the planned meeting in Malaysia, following a video call with Vice-Premier He Lifeng last week. Bessent characterized their earlier virtual engagement as “frank and detailed discussions.”

Context of Recent Tensions

These high-level talks occur amid heightened trade tensions this month, following a series of economic sanctions and export controls. President Trump had issued warnings of potential 100 percent tariff hikes, threatening to undermine previous negotiations and a temporary truce that followed the peak of the conflict in April.

In response, China announced a significant expansion of its export control regime for rare earth elements. Beijing framed this action as retaliation against Washington’s broadening of its Entity List, which imposes substantial trade sanctions on designated companies and individuals.

Outlook

These discussions in Malaysia underscore ongoing efforts to manage complex economic ties between China and the United States. The outcome of these talks, and the potential summit between President Xi and President Trump, will be closely watched for their implications on global trade stability.