Global Markets Rally as U.S.-China Trade Tensions Ease

The United States and China reached a preliminary consensus during high-level trade talks in Malaysia this weekend, easing fears of a renewed tariff war and sparking a rally in global markets. The discussions, held in Kuala Lumpur from October 24–26, involved U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, with both sides agreeing to a framework to address contentious issues including rare earth exports, tariffs, and shipping levies, according to Turkiye Today. The breakthrough comes ahead of a planned meeting between U.S. President Donald Trump and Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation (APEC) summit in South Korea later this month, Seeking Alpha reported.

Tensions between the world's two largest economies had escalated sharply in recent weeks. Washington imposed new technology restrictions and proposed tariffs on Chinese ships, while Beijing announced tighter export controls on rare earth elements, critical for electronics and defense systems, as Bloomberg Law reported. The U.S. had threatened tariffs of up to 100% on Chinese goods, prompting fears of a global supply chain crisis. However, the preliminary agreement in Malaysia appears to have averted the immediate escalation. U.S. Treasury Secretary Scott Bessent confirmed the 100% tariff threat is "effectively off the table" for now, CoinDesk reported.

The talks marked the fifth round of in-person negotiations since May, when a temporary truce paused new tariffs until November 10. That deadline loomed as a key test for bilateral relations, with analysts warning of renewed volatility if no deal materialized. Instead, the Malaysia discussions produced a "very substantial framework" to stabilize trade relations, according to Bessent, as reported by BeInCrypto. China's Commerce Ministry emphasized the agreement would "properly address each other's concerns" and build on past consultations, TheStreet reported.

The market reaction was swift. Cryptocurrency prices surged, with Bitcoin climbing above $113,000 for the first time in weeks, while the broader crypto market cap rose to $3.92 trillion, Coinpedia reported. Equities also advanced, reflecting reduced geopolitical risk. The easing tensions eased fears of a trade war that had previously triggered a $200 billion selloff in crypto markets in early October, according to Coindoo.

Analysts noted the deal could pave the way for a more structured trade relationship. U.S.-China cooperation on export controls and fentanyl enforcement was highlighted as a potential area of progress. However, challenges remain. The Trump-Xi meeting in South Korea will need to finalize the framework, and both sides emphasized that "all options are on the table" if negotiations stall.

The preliminary agreement has injected optimism into global markets, but its long-term success will depend on implementation and broader economic cooperation. For now, the de-escalation has provided a reprieve for investors, with crypto and equities benefiting from reduced uncertainty.