China confirms trade talks with U.S. in Malaysia to defuse tensions, set table for Trump and Xi

China said Thursday it is sending its top trade official, Vice Premier He Lifeng, to meet with top Trump administration officials in Malaysia as the world’s largest economies try to cool rising trade tensions.

The commerce ministry in Beijing said Mr. He will attend the summit in Southeast Asia from Friday to Monday. 

He is expected to meet with Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer in pursuit of a trade deal after China clamped down on rare earth exports and President Trump threatened to add a 100% tariff on Chinese imports in retaliation, starting in November.

“The two sides will hold consultations on key issues in China-U.S. economic and trade relations in accordance with the important consensus reached in previous phone calls between the two heads of state this year,” the Chinese commerce ministry said.

The meetings will set the table for a possible sitdown between Mr. Trump and Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation summit in South Korea, which starts Oct. 31.

Mr. Trump has toggled between talking tough on China, saying the U.S. has economic leverage and can find rare earths elsewhere, and seeking a positive outcome with Beijing.

“I think we will make a deal,” Mr. Trump said in the Oval Office on Wednesday.

The U.S. and China traded sky-high tariffs earlier this year before a series of summits led to a truce that knocked levies down to manageable levels and paved the way for deeper talks about trade practices.

However, the truce fell apart this month when China severely restricted the export of rare earth elements to the U.S. and other countries. The elements are critical components of electric vehicles, lasers, military equipment and other technology.

Beijing appeared angered by the Trump administration’s decision to impose fees on Chinese ships in American ports and restrict exports of certain technologies.

At the same time, China characterized its move as a common trade practice.

“The measures are designed to better safeguard national security and interests and to better perform non-proliferation and other international obligations,” the commerce ministry said. “These measures are not targeted at any specific country or region. Legitimate and compliant export applications will be reviewed and granted accordingly.”

Trump officials say they have leverage in talks because Chinese companies rely on the rich U.S. market. 

Mr. Trump is threatening to impose an extra 100% tariff on Chinese goods entering the U.S., which would effectively bring levels on some products to over 150%.

Beyond rare earths, Mr. Trump wants Mr. Xi and his country to purchase U.S. soybeans. China used to be a major customer for American growers, but the Chinese turned to South American suppliers during trade tensions earlier this year.

It is a massive financial hit for U.S. growers during this year’s harvest. It’s also creating political pressure for Mr. Trump, who relied on the heartland for political support and now must consider bailouts for farmers.