Trade War Monitor, Oct. 27: China, U.S. Near Trade Deal Ahead of APEC Summit

[para. 1] The past week has witnessed significant fluctuations in global markets and supply chains, culminating in tentative progress ahead of a pivotal U.S.-China presidential summit. Negotiators from both countries, meeting in Malaysia, have reached a basic consensus that for now averts additional U.S. tariffs on Chinese goods. U.S. Treasury Secretary Scott Bessent confirmed that the feared imposition of 100% tariffs on Chinese imports has been withdrawn before the November 1 deadline, providing temporary relief to global trade stakeholders [para. 1].

[para. 2][para. 3] Despite this progress, tensions persist on multiple fronts. The trade conflict has expanded to the maritime sector, with both the U.S. and China imposing costly new fees on each other's shipping vessels, directly influencing global shipping and cruise operations. Simultaneously, the technology rivalry continues, as China engages the Netherlands and the European Union to defuse a dispute concerning the semiconductor firm Nexperia. Notably, Beijing has reinforced technological self-reliance as a cornerstone of its national strategy, highlighting the ongoing tech competition with the U.S. and embedding self-reliance as a key objective in its 15th Five-Year Plan (2026–2030) [para. 2][para. 3][para. 18][para. 19].

[para. 4] The legal foundation of President Donald Trump’s tariff policies is about to undergo significant scrutiny, with the U.S. Supreme Court scheduled to hear a landmark case on November 5. President Trump intends to attend the hearing, a historic first for an incumbent president, stressing the high stakes involved in the litigation. Trump contends that a decision against his use of the International Emergency Economic Powers Act for imposing broad tariffs could trigger financial instability and hardship in the U.S. [para. 4][para. 37][para. 38][para. 39].

[para. 5][para. 6][para. 7][para. 8] Trade officials from both sides concluded two days of intensive discussions in Kuala Lumpur, with Chinese Vice Premier He Lifeng, U.S. Treasury Secretary Scott Bessent, and U.S. Trade Representative Jamieson Greer leading the meetings. These talks, described as candid and constructive, resulted in a consensus to prevent the imminent 100% U.S. tariffs and prompted China to postpone new rare earth licensing measures by a year. The agreement now awaits finalization and domestic approval before a planned presidential summit on the sidelines of the APEC summit in South Korea [para. 5][para. 6][para. 7][para. 8].

[para. 10][para. 11][para. 12][para. 13] Regarding the tech dispute, China’s commerce minister initiated discussions with his Dutch and EU counterparts to seek a resolution over Nexperia, emphasizing contractual and market-based solutions. The Dutch expressed willingness for cooperative dialogue. Meanwhile, Nexperia China publicly accused its Dutch parent management of interference and rejected the dismissal of a key executive as legally irrelevant in China, pledging to safeguard its operational autonomy and legal rights [para. 10][para. 11][para. 12][para. 13][para. 15][para. 16].

[para. 20][para. 21][para. 22][para. 23][para. 24] The economic battle has also erupted at sea. Recent incidents include U.S. and Chinese vessels incurring millions in new, punitive port fees—$4.25 million imposed on a Chinese ship at Savannah, Georgia, and a nearly $626,000 fee on a U.S. ship in Ningbo, China. Additionally, a U.S. cruise vessel avoided a hefty $1.6 million Chinese port fee by diverting to South Korea. These actions reveal a developing pattern of maritime retaliations, signaling that key shipping routes are the latest front in the U.S.-China economic conflict [para. 20][para. 21][para. 22][para. 23][para. 24].

[para. 27][para. 28][para. 29] The immediate future of U.S.-China trade relations will hinge on two major events: the presidential summit in South Korea and the forthcoming Supreme Court hearing, both of which are poised to shape the trajectory of the ongoing trade war [para. 27][para. 28][para. 29].