US, China agree to prelim trade framework ahead of Trump-Xi meeting

Good morning. Here's what happened overnight and what you need to know today.

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1.

Deal framework: US Treasury Secretary Scott Bessent and Chinese Vice Commerce Minister Li Chenggang said on Sunday that officials from both countries had reached a preliminary trade framework during talks in Kuala Lumpur. Li said the two sides had achieved a “preliminary consensus” on a range of issues, while Bessent described the outcome as a “very successful framework” for Donald Trump and Xi Jinping to review at their expected meeting in South Korea on Thursday. Bessent said Trump’s threat of imposing 100% tariffs on Chinese goods was now “effectively off the table”, and that China was expected to delay its rare earth licensing regime for one year. In a series of interviews, Bessent said the framework included expected purchases of US soybeans and progress on a final agreement to transfer control of TikTok’s US operations. China’s Li described the discussions as “intense” but constructive. (Capital Brief)(Reuters)(Bloomberg)(NYT)(WSJ)

2.

ASEAN summit: During the first day of his Asia tour, Donald Trump signed a series of trade and critical minerals agreements with Southeast Asian countries to expand market access and secure supply chains ahead of his high-stakes meeting with Xi Jinping. Announced at the ASEAN summit in Kuala Lumpur, the deals with Thailand, Malaysia, Cambodia and Vietnam include commitments to reduce or eliminate US reciprocal tariffs of 19-20%, and pledges to roll back trade barriers on American goods. Thailand agreed to remove tariffs on 99% of US imports and confirmed commercial deals including commitments to purchase 80 aircraft worth USD18.8 billion. Malaysia committed not to ban or impose quotas on critical mineral exports to the US. Cambodia pledged to eliminate tariffs on US agricultural and industrial goods, while Vietnam committed to increasing purchases to narrow its USD123 billion trade surplus. Trump also oversaw the formal signing of a ceasefire between Cambodia and Thailand, with Cambodian Prime Minister Hun Manet saying he would nominate Trump for a Nobel Peace Prize. (Capital Brief)(Bloomberg)(Reuters)(NYT)

3.

Carney’s pushback: Canadian Prime Minister Mark Carney said the world may start shifting away from trading with the United States, not only because of Trump's tariffs but also due to the administration’s rejection of green energy, Bloomberg reported. His comments, made at a business and investment forum in Malaysia, follow Trump’s announcement of a 10% tariff increase on Canadian goods in retaliation for a CAD75 million ($82 million) Ontario ad that used edited Ronald Reagan clips to criticise US tariffs. “That is not a priority of the president of the United States, or at least it’s not an administration priority in the United States. So naturally, trade is going to shift away,” Carney said. Trump had called the ad a “hostile act” and a “serious misrepresentation of the facts”, and said it appeared timed to influence an upcoming US Supreme Court case on the legality of his tariffs. Ontario Premier Doug Ford, who commissioned the ad, said the campaign would be paused Monday to help resume talks. (Bloomberg)

4.

No exceptions: Labor ruled out a proposal for introducing a ‘Text and Data Mining Exception’ as it consults on updates to Australia’s copyright laws in order to protect the work of creatives from being used by AI. In a statement released Sunday, the government said that as it consults on possible updates to Australia’s copyright laws, it will not include the exception which was first flagged by the Productivity Commission in August and lobbied for by big tech players like OpenAI. Without the exception, AI developers will not be able to use the works of Australian creators for free and without permission to train AI systems. Attorney-General Michelle Rowland said: “This Government has repeatedly said that there are no plans to weaken copyright protections when it comes to AI.” The government is convening its Copyright and AI Reference Group on Monday and Tuesday this week to discuss AI use. Meanwhile, Australia will spend $83.5 million by 2028 to build cyber security capacity across the Indo-Pacific, assistant minister Matt Thistlethwaite said, citing rising online crime and escalating global threats (Capital Brief)

5.

NEPA baby: The Australian government plans to establish an environment watchdog to improve compliance and enforcement of environmental laws as part of proposed reform legislation. The National Environmental Protection Agency (NEPA) would have the ability to enforce project conditions and audit state and territory processes for assessing and approving them in line with new standards, the government said Sunday. Environment Minister Murray Watt is set to introduce a major overhaul of the country’s environmental laws on Thursday, with the AFR reporting that Watt is open to watering down new powers to pre-emptively reject developments in return for Coalition support of the rules. Opposition leader Sussan Ley told Watt to split the bill into two tranches, to allow the Coalition to more readily pass changes to streamline project approvals and deal with the contentious proposals including the NEPA, separately. The news comes as conservatives intensified calls for the country to drop its net-zero emissions targets. (Bloomberg)(AFR)

6.

Fun’s over: Embattled telecommunications giant Optus has emptied staff from one of the six buildings at its head office in Sydney's Macquarie Park in preparation for a potential sublease and cut onsite staff perks under a broader review of onsite services as it scrambles to rein in costs. The number two carrier, which has been under fire over the past month after a triple zero outage on its mobile network was linked to three fatalities, has removed some table tennis tables from its campus and also reduced staff bus services as it scrambles to find savings. Parent company Singtel has been pushing management, led by chief executive Stephen Rue, to cut costs at the telco, but insiders say that has begun to sap internal morale. Staff at one of Optus’ campus buildings have now been rehoused across the other five. (Capital Brief)

7.

Spill incoming: Biotech giant CSL faces the serious prospect of a rebuke from shareholders at this week's annual general meeting after a torrid year which has seen almost $40 billion wiped from its market value. Proxy advisory firm CGI Glass Lewis earlier in October specifically called out CSL chief executive Paul McKenzie for selling millions of dollars’ worth of shares in the ailing biotech and recommended shareholders hit the board with a second strike against its remuneration report. “Significant shareholder losses in FY2025 have revealed a disconnect between the CSL remuneration structure and shareholder returns,” CGI Glass Lewis said in its proxy paper, seen by Capital Brief. The document specifically called out McKenzie for disposing of “significant parcels of shares” in the three years since his appointment in March 2023. In a letter responding to the proxy adviser's position, CSL director Megan Clark said the company “strongly disagrees” with its rationale. (Capital Brief)

8.

RNA deal: Novartis is acquiring biopharmaceutical company Avidity Biosciences for USD12 billion ($18.4 billion) in cash, its biggest deal in more than a decade, as it moves to offset looming patent expiries on key drugs. Avidity shareholders will receive USD72 per share, a 46% premium to its last closing price. The deal, expected to close in the first half of 2026, includes the spin-off of Avidity’s early-stage precision cardiology programs into a new company, SpinCo, Novartis said in a statement. The acquisition adds three late-stage neuromuscular disease programs to Novartis’ neuroscience pipeline and advances its xRNA strategy through Avidity’s Antibody Oligonucleotide Conjugates platform. Novartis CEO Vas Narasimhan told FT the deal would dilute profitability by 1 to 2 percentage points over the next few years. He said two drug candidates could each generate “many billions” in peak annual sales, while a third could generate between USD500 million and USD1 billion. (Novartis)(Reuters)(FT)