The US and China say a trade deal is nearing as Trump and Xi prepare for a high-stakes meeting

KUALA LUMPUR, Malaysia (AP) — A U.S.-China trade deal is nearing, officials from the world’s two largest economies said Sunday, as they reached a tentative consensus on President Donald Trump and Chinese leader Xi Jinping aiming to finalize it during their high-stakes meeting.

Any agreement would provide relief to international markets even if it did not address fundamental issues involving imbalances in manufacturing and access to the latest computer chips.

Recently, Beijing limited its exports of rare earth elements needed for advanced technologies, and Trump responded by threatening to impose additional tariffs on Chinese products. The potential for wider conflict threatens to undermine economic growth around the world.

Read more: Here’s what’s in China’s five-year plan as trade wars continue

China’s chief trade negotiator, Li Qinggang, told reporters that the two sides had reached a “principled consensus,” while Trump’s Treasury Secretary, Scott Besent, said there was a “very successful framework.”

Trump also expressed confidence in reaching an agreement, saying that the Chinese “want to make a deal and we want to make a deal.” The Republican president is scheduled to meet with Xi on Thursday in South Korea, the final stop on his tour through Asia.

Besant told CBS’ “Face the Nation” that the threat of additional tariffs on China is “really off the table.” In interviews on several US news programs, he said that discussions with China had resulted in preliminary agreements to block fentanyl precursor chemicals from entering the United States, and that Beijing would make “significant” purchases of soybeans and other agricultural products while deferring export controls on rare earth elements.

When asked how close an agreement was, Trump’s trade representative, Jamison Greer, said on “Fox News Sunday” that “it’s really going to depend” on the two presidents.

Meanwhile, Trump reiterated that he intends to visit China in the future, and suggested that Xi come to Washington or Trump’s Mar-a-Lago club in Florida.

Progress toward a potential agreement came during the annual summit of the Association of Southeast Asian Nations, in Kuala Lumpur, as Trump seeks to burnish his reputation as an international dealmaker.

However, his way of pursuing deals meant serious unrest at home and abroad. His import taxes disrupted relations with trading partners, while the US government shutdown brought him into conflict with the Democrats.

Trump attends a ceasefire ceremony between Thailand and Cambodia

At the summit, Thailand and Cambodia signed an expanded ceasefire agreement during a ceremony attended by Trump. His threats of economic pressure prompted the two countries to stop skirmishes along the disputed border earlier this year.

Thailand will release Cambodian prisoners and Cambodia will begin withdrawing heavy artillery as part of the first phase of the deal. Regional observers will monitor the situation to ensure that fighting does not resume.

“We did something that a lot of people said couldn’t be done,” Trump said. Cambodian Prime Minister Hun Manet called it a “historic day,” and Thai Prime Minister Anutin Charnvirakul said the agreement creates “the building blocks for a lasting peace.”

The President signed economic frameworks with Cambodia, Thailand and Malaysia, some of which aim to increase trade in vital minerals. The United States wants to rely less on China, which has made limited use of exports of key components in technology manufacturing as a bargaining chip in trade talks.

“It is very important that we work together as willing partners with each other to ensure that we have seamless supply chains, secure supply chains, for quality of life, for our employees and for our security,” Greer said.

Trump is re-engaging with a key region of the world

Trump attended this summit only once during his first term, and US Defense Secretary Pete Hegseth appeared unfamiliar with ASEAN during his confirmation hearing in January.

This year’s event was an opportunity for Trump to reconnect with countries with a combined economy of $3.8 trillion and a population of 680 million.

Trump said: “The United States is with you 100%, and we intend to be a strong partner and friend for many generations to come.” He described his counterparts as “amazing leaders” and said that “everything you touch turns to gold.”

Trump’s tariff threats have been credited with helping spur negotiations between Thailand and Cambodia. Some of the worst modern fighting between the two countries took place over five days in July, killing dozens and displacing hundreds of thousands of people.

The president, at the time, threatened to withhold trade agreements unless the fighting stopped. The fragile truce has continued since then.

Malaysian Prime Minister Anwar Ibrahim praised the agreement between Thailand and Cambodia, saying at the summit that it “reminds us that reconciliation is not a concession, but an act of courage.”

Tariffs are the focus of Trump’s trip

Trump met with Brazilian President Luiz Inacio Lula da Silva in Kuala Lumpur, who was also attending the summit. There was a disagreement between them over Brazil’s trial of Jair Bolsonaro, the country’s former president and a close ally of Trump. Bolsonaro was convicted last month of trying to overturn the election results in his country.

During their meeting, Trump said he could reduce tariffs on Brazil that he enacted in an attempt to go easy on Bolsonaro.

“I think we should be able to make some good deals for both countries,” he added.

While Trump courted Lula, he avoided Canadian Prime Minister Mark Carney. The president is angry with Canada over a TV ad protesting his trade policies, and on his way to the top, he announced on social media that he would raise tariffs on Canada because of it.

One of the leaders absent from the summit was Indian Prime Minister Narendra Modi. Although he was close to Trump during Trump’s first term, the relationship has become more strained recently. Trump caused alarm when he boasted that he had succeeded in settling the recent conflict between India and Pakistan, and increased tariffs on India in exchange for its purchase of Russian oil.

Associated Press writers Josh Bock in Tokyo and Jintamas Sakhornchai in Bangkok contributed to this report.