Trump Predicts Breakthrough With China: “We Will Come Away With a Deal”

In a major diplomatic shift, Donald Trump declared that the United States and China are poised to come away with a deal, ahead of his scheduled summit with Xi Jinping. The remarks, delivered while en route to Asia, signal a potential de-escalation of the escalating trade tensions that have dominated global markets. 

Trump emphasized his regard for Xi, stating, “I’ve got a lot of respect for President Xi and I think we’re going to come away with a deal.” The announcement follows a weekend of high-level talks in Kuala Lumpur involving the U.S. trade and treasury teams, where negotiators reportedly reached a basic consensus framework that might avoid the U.S. imposing threatened 100% tariffs on Chinese imports. 

What’s Changing

The current developments point toward a possible shift in the U.S.–China relationship:

• China may defer its planned export controls on rare-earth minerals, a move that had rattled global supply chains. 

• The U.S. appears ready to hold off on hiking tariffs to 100% if the deal holds, replacing it with a more measured approach. 

• While details are still being finalised, the move could restore relief to sectors ranging from agriculture to technology.

Why This “Trade Deal” Is Significant

1. Global economic ripple effects
The possibility of a U.S.–China deal has broad implications, from easing global supply-chain pressure to stabilising markets currently jittery over escalating trade war risks.

2. Impact on key industries
A reduction or postponement of tariffs and export restrictions directly affects technology firms, automakers, rare-earth industries and U.S. farmers who have been targeted in the tariff exchanges.

3. A strategic pivot for Trump
By projecting confidence in a deal, Trump is indicating a willingness to move toward negotiation rather than confrontation a message that may appeal to business and economy-focused voters ahead of campaign cycles.

What’s Next

• The Trump–Xi meeting scheduled in South Korea this week will be the true test of any deal—both sides must move from framework to final agreement.

• Analysts will watch for formal announcements, especially around “maximum‐tariff rollback”, “exports resuming”, and “supply-chain access restored” between the two countries.

• Markets may respond strongly equities, commodities and currency markets could rally on breakthrough signals or flip into risk-off mode if talks falter.

Frequently Asked Questions (FAQs)

Q1: Did Trump say a deal is finished?
A1: No Trump said he expects both sides to “come away with a deal”, but noted the finalisation still depends on the upcoming summit with Xi. 

Q2: What is the core issue in the U.S.–China talks right now?
A2: Current friction centres on China’s proposed export controls on rare-earth minerals and the U.S.’s threat of 100% tariffs on Chinese imports, both of which are being addressed in the framework talks. 

Q3: When is the Trump–Xi meeting scheduled?
A3: The summit is expected this week in South Korea, coinciding with the APEC international conference. 

Q4: Could tariffs still go up if the deal falls through?
A4: Yes if negotiations collapse, the U.S. has signalled willingness to proceed with the threatened 100% tariff increase, which would represent a sharp escalation. 

Q5: What happens to U.S. farmers in all this?
A5: The deal framework reportedly includes commitments by China to resume large purchases of U.S. soybeans and agricultural goods, potentially boosting the sector after years of trade harm. 

Q6: How should investors interpret this announcement?
A6: Markets tend to respond to hope of resolution rather than resolution itself. Investors should monitor official announcements and be cautious of premature optimism.