Trump and Xi Near Breakthrough Deal to Avert U.S.-China Trade Collapse - Markets Brace for Impact

Global markets hold their breath as two economic superpowers edge toward resolution.

The Diplomatic Dance

After months of escalating tensions and tariff threats, negotiators finally bridge the gap. Both sides concede ground on key sticking points—intellectual property protections and agricultural market access top the agenda.

What's at Stake

Supply chains frozen mid-transaction, manufacturing orders in limbo, and billions in pending investments hang in the balance. The deal promises to unfreeze critical trade corridors and restore predictable commerce flows.

Market Implications

Traditional assets rally on the news, but crypto markets watch warily—because when central banks start playing nice, decentralized alternatives lose their crisis appeal. Another reminder that peace sometimes costs more than conflict for disruption assets.

The handshake could happen within days... or collapse entirely. In global trade talks, the only certainty is uncertainty itself.

Rare earth controls dominate discussion

The talks happened on the sidelines of a gathering of Southeast Asian nations. When a reporter asked if rare earths came up during the discussions that started Saturday, Greer confirmed the two countries covered many topics, including keeping their current pause on new trade actions in place.

Both nations want to stop their trade dispute from getting worse. TRUMP has warned he will put 100 percent tariffs on Chinese products and impose other restrictions starting November 1. This threat came after China greatly increased its limits on shipping rare earth magnets and minerals to other countries.

Trump flew into the Malaysian capital Sunday morning for the summit. The visit kicks off a five-day trip across Asia that will end with a meeting between Trump and Chinese President Xi Jinping in South Korea.

If the Kuala Lumpur talks go well, it clears the path for the October 30 meeting between the two leaders. The WHITE House has said the Trump-Xi meeting will happen, but Beijing has not yet confirmed it.

Trump plans to discuss several issues with Xi. These include Chinese purchases of American soybeans, worries about Taiwan, and the release of Jimmy Lai, a jailed Hong Kong media businessman. Lai started the now-closed Apple Daily newspaper, which supported democracy. His imprisonment has become the most well-known case of China limiting rights and freedoms in Hong Kong.

Trump also said he wants China’s help dealing with Russia as the war in Ukraine nears its fourth year.

Secretary of State Marco Rubio made clear Sunday that America will not abandon Taiwan in exchange for better trade terms with China.

Fragile trade agreement under strain

Relations between the world’s two biggest economies have become tense in recent weeks. A fragile agreement reached during their first round of talks in Geneva in May and extended in August has not stopped both sides from hitting each other with more penalties, export limits, and warnings of stronger payback.

The current round of talks will likely focus on China’s tighter controls on rare earth exports, which have led to worldwide shortages.

As reported by Cryptopolitan earlier, the Trump administration is thinking about stopping exports of “critical software” to China in response, which WOULD affect items from laptops to jet engines.

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