A new round of economic talks between two global powers.

A new round of economic talks between two global powers.

The two countries’ delegations met and held talks in Kuala Lumpur today. The Chinese delegation is led by Chinese Vice Premier He Lifeng and the US delegation is led by US Treasury Secretary Scott Besant. The main goal of the talks is to prevent escalation of trade retaliation and to pave the way for direct talks between Chinese President Xi Jinping and US President Donald Trump on the sidelines of the Asia-Pacific Economic Cooperation summit in South Korea.

According to Bloomberg, Trump had previously threatened to sharply increase tariffs on Chinese goods and even cancel his in-person meeting with the Chinese president in response to Beijing’s decision to expand controls on rare earth exports.

The interim trade agreement between the two countries expires on November 10, and if it is not extended, there is a possibility of renewed economic tensions. In recent weeks, Washington has expanded some technology restrictions against Beijing and announced that it is considering imposing new tariffs on Chinese ships calling at U.S. ports.

China has retaliated, announcing tighter controls on exports of rare earth elements and other vital materials. China’s Ministry of Commerce held a rare meeting with foreign companies in Beijing on Monday to ensure that the new export restrictions were not intended to hinder normal trade.

The ministry has previously stressed that the export controls aim to create a unified and efficient system and to strike a balance between economic development and national security. A spokesman for the Chinese Ministry of Commerce said that the controls on rare earth exports were a legitimate measure within the framework of the country’s domestic laws and regulations.