China, US to hold trade talks in Malaysia in coming days Azad News HD
how did we get here
Escalating trade tensions
In recent months the relationship between China and the U.S. has drifted into sharper territory. On one side, the U.S. has threatened very large tariffs (including a 100 % tariff on Chinese goods starting November 1) in response to what it sees as unfair trade practices and export restrictions by China. On the other side, China responded with export curbs on rare earths—a key strategic sector for both civilian high tech and defence industries.
For example, a Reuters report noted:
“U.S. Treasury Secretary Scott Bessent will meet with Chinese Vice Premier He Lifeng in Malaysia next week in a bid to prevent a sharp escalation in U.S. tariffs …”
And China’s foreign ministry spokesman emphasised that:
“Tariff wars and trade wars are not in the interests of any parties … Both sides should resolve relevant issues through consultations based on equality, mutual respect, and reciprocity.”
So the official line from China is one of caution, albeit from a position of asserting its own interests strongly.
Prior rounds of negotiations & truce attempts
The two powers have held multiple rounds of discussions in recent months. For instance, calls and in-person meetings between Bessent and He have taken place in Europe and elsewhere, culminating in talks that were described by Chinese state media as “candid, in-depth and constructive.”
An agreement or truce had been reached to hold tariffs steady (or at least slow escalation) until a deadline (November 10) but that now appears under strain.
Why Malaysia?
Choosing Malaysia as the venue is strategic. The meeting in Malaysia coincides with the Association of Southeast Asian Nations (ASEAN) summit being hosted by Malaysia, giving both sides a neutral-ish venue in the region rather than in Washington or Beijing.
Malaysia also as significant trade links to both China and the U.S., and thus faces pressure from both sides. Analysts note that Malaysia (and ASEAN countries more broadly) are caught in a dilemma: they must navigate between U.S. expectations and China’s influence.
What are the main issues on the table?
When two superpowers like the U.S. and China sit down to negotiate trade talks, the agenda can be broad. In this instance, several items loom large:
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Tariffs and retaliatory measures – The U.S. is threatening or has imposed large tariffs on Chinese goods; China in turn has retaliated or threatened export controls. Resolving or stabilising this is a key goal.
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Export controls on critical materials – China’s recent curbs on rare‐earth exports are a major flashpoint. Rare earths are vital for high‐tech manufacturing, defence, and supply chains globally. The U.S. has made this a central issue.
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State-driven economic distortions – The U.S. accuses China of state-led industrial policy that distorts trade (for example, subsidies, forced technology transfer, etc.). The Chinese side resents U.S. unilateral measures and calls for respect of multilateral trade rules.
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Supply-chains, regional trade flows and third-party impacts – Malaysia and ASEAN industrial chains are tied to both China and the U.S. Disruptions have knock-on effects for other countries. As one article noted, “Malaysia can expect to face pressure to boost agricultural imports from the US … as the escalating trade conflict between the US and China will make it harder for Malaysia to navigate its dealings with its two largest trade partners.”
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Tariff truce expiry and looming deadlines – The previous understanding, which paused major escalation until November 10, is about to expire, raising urgency to get something in place.
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Diplomatic symbolism / wider geopolitics – Beyond pure economics, the trade talks are set amidst broader strategic competition: technology, defence, regional influence. The meeting is therefore as much about signalling as substance.
Motives and interests of each side
China’s perspective
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China wants to avoid a full-blown trade war that could undermine its growth, employment and economic stability.
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It emphasises the principle of “equality, mutual respect and reciprocity” in trade talks.
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China also wants to protect its domestic industries, maintain its central role in supply chains (including rare earths, etc.) and resist U.S. demands that it relinquish strategic leverage.
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Hosting the talks in Malaysia may help China project that it is engaging constructively and regionally, not purely reacting to U.S. pressure.
United States’ perspective
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The U.S. seeks to pressure China into reducing trade imbalances, opening markets, ending unfair practices, and rolling back export controls that hurt U.S. industry.
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It also wants to manage political risk: President Donald Trump has threatened major tariffs, but understands that escalation would carry major costs. For example, he described the threatened 100 % tariff as “not sustainable”.
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The U.S. sees maintaining a rules‐based international trading system as crucial, and views China’s unilateral export curbs as a threat to that system.
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Holding talks also allows the U.S. to demonstrate to domestic audiences and to partners that it is being proactive in defending American interests.
Malaysia / ASEAN and regional players
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Malaysia finds itself in a delicate position: it has strong economic ties with both China and the U.S., and must maintain some balance. Malaysian Prime Minister Anwar Ibrahim has emphasised the country’s independence, stating it can deal with both powers and will not choose sides.
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For ASEAN more broadly, the U.S.–China trade war presents risks and opportunities: risk of disruption, opportunity of trade diversion. The region is therefore eager for de-escalation.
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Malaysia hosting the talks contributes to its diplomatic standing as a neutral forum and gives it leverage to ensure its voice is heard.
Why this moment matters
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Global economic stakes – The world’s two largest economies are intertwined; a full-scale trade war would slow global growth, disrupt supply chains, raise costs and increase economic uncertainty. A recent warning from the World Trade Organization said that a prolonged decoupling by the U.S. and China could slash global GDP by about 7 %.
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Technology and strategic supply-chains – Rare earths, semiconductors, advanced manufacturing: these are sectors where trade policy overlaps with national security. The outcome of these talks will shape the architecture of these supply-chains for years.
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Precedent for multilateral trade governance – The way this dispute is handled will signal how much influence multilateral institutions and rules have versus unilateral, bilateral power politics.
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Domestic political implications – Both Beijing and Washington face domestic pressures. For China: maintaining GDP growth, employment, avoiding unrest; for the U.S.: protecting jobs, satisfying voters, maintaining global leadership. A failure in talks could trigger voter or investor backlash.
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Regional ripple effects – Countries like Malaysia, and other ASEAN states, are sensitive to changes in trade flows, tariffs and investment. Averted war is good for them; escalation may harm them disproportionately given their embedded role in global supply-chains.
What might be the outcomes / scenarios
Optimistic scenario
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The talks succeed in establishing a pause or slow-down of tariff escalation: China agrees to ease its export controls (or at least clarify them transparently) and the U.S. agrees to delay or moderate a threatened 100 % tariff.
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Both sides agree to launch a working group on supply-chain resilience, rare earths, semiconductors, and high-tech coordination.
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They set a timetable for further negotiation, thereby restoring investor confidence, stabilising markets, and reducing risk of escalation.
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Malaysia (and ASEAN) gets acknowledged as a useful venue and mediator, enhancing its regional role.
Middle scenario
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The talks produce modest progress: a truce is extended, but not a full deal. Some tariff threats remain in place; export controls remain contested.
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Both sides maintain dialogue and avoid the worst-case outcome, but underlying issues remain unresolved and may resurface later.
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The market response is mixed: some relief, but nervousness remains about future escalation.
Pessimistic scenario
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Talks stall or collapse. China refuses meaningful concessions on export curbs; the U.S. imposes the threatened 100 % tariff on November 1.
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Retaliation follows from China; supply chains divert, global trade slows, uncertainty spikes.
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Malaysia and ASEAN face major collateral damage: disruptions in trade, investment, increasing pressure to pick sides.
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The credibility of multilateral trade governance is damaged; global economic growth is impaired.
Potential implications
For China
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A positive deal would provide Beijing breathing room to continue its economic transition (towards more domestic consumption, higher tech, services) without the drag of a large-scale trade war.
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It would help preserve export markets, particularly in Southeast Asia and beyond, which are sensitive to U.S.–China tensions.
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It would bolster China’s diplomatic image: as willing to engage and finding solutions rather than digging in and escalating.
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Conversely, if talks fail, China could face serious disruption: export markets hit, supply chain fragmentation, and internal economic impact (job losses, slower growth).
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Also, the rare-earth leverage is important for China; how much it is willing to moderate its stance will show the extent to which China gives up strategic advantage for economic stability.
For the United States
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A successful negotiation would allow the U.S. to claim that it defended American interests and avoided the damage of tariff escalation. It would be a domestic political win.
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It would also help stabilise supply chains and reduce inflationary pressures (tariffs often increase input costs).
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On the flip side, the U.S. must ensure it actually extracts concessions (market access, industrial policy changes) or risk being seen as weak.
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If it fails, the U.S. may impose large tariffs, increasing costs for American consumers and companies, risking retaliation, and potential job losses in export‐dependent sectors.
For Malaysia and the ASEAN region
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If escalation is avoided, Malaysia will benefit from increased trade stability and maybe increased investment as supply chains re‐assess.
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Malaysia’s role as host enhances its diplomatic standing, and it may gain indirectly from being part of a stable regional dialogue.
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Conversely, escalation would harm Malaysia: its trade flows suffer, investment goes elsewhere, and it may face pressure from both powers to pick sides or concede on strategic issues like semiconductors, AI, or critical-minerals.
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The broader ASEAN as a bloc also gains from stability: uncertainty is the enemy of trade and investment in this region.
For the global economy
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The world economy benefits from reduced risk of escalation: trade volumes, investment flows, supply chains are more stable.
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Many countries beyond China and the U.S. are part of these global supply chains; disruptions in U.S.–China trade ripple outward, hurting third-party economies.
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Conversely, escalation would raise global costs, slow growth, increase inflation, and potentially disrupt global cooperation in areas beyond trade (climate, health, etc.).
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It also sends a signal about how major powers manage economic rivalry in a multipolar world: constructive resolution vs. zero-sum competition.
Key questions to watch
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Will China meaningfully ease its export curbs on rare earths and other strategic materials? If not, the U.S. may see no “give” and escalate tariffs.
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Will the U.S. moderate its threatened 100 % tariffs and be willing to commit to a moratorium? If the U.S. insists on escalation, China may dig in.
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What role will transparency, monitoring and enforcement play? Often the devil is in the details: commitments are easier than implementation.
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How will other countries respond? Particularly, will ASEAN states recalibrate trade flows, or will they be collateral damage?
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What is the structure of any agreement? Is it merely a temporary truce, or a framework for deeper engagement (e.g., technology trade, supply chain resilience, multilateral rules)?
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What happens if one side “blinks”? Trade wars are often testing games: who gives first, and what is the cost?
Reflection: Why this matters for us
For an observer, this is more than just two countries negotiating tariffs. It is a test of how the largest economies manage interdependence, strategic rivalry, supply-chain complexity, and domestic political expectations all at once. The outcome will influence how global economics evolves in the next decade: whether trade becomes more fragmented and nationalist, or if cooperation and rules can hold.
For individuals and businesses: this matters because disruptions in trade mean higher prices, disrupted supply chains, changed investment flows, job risks and technological shifts. For countries like Malaysia (and by extension Pakistan, given its connections to regional trade) the stability of global trade is vital.
Conclusion
The announcement by China that it will hold a next round of trade talks with the U.S. in Malaysia is a signal of urgency. It shows both sides understand the risk of continuing down a path of escalating tariffs and unilateral measures. While the talks do not guarantee a breakthrough, they offer a window of opportunity to stabilise relations, address underlying issues, and avoid a destructive spiral.
If handled well, the Malaysia talks could represent a turning point: a step from confrontation to structured negotiation, from short-term tit-for-tat to longer-term stability. If mishandled, however, the world could face a resumption of aggressive trade war dynamics, with significant cost to both economies and beyond.
