Crypto Surges as U.S.-China Trade Truce Eases Global Market Fears

Top U.S. and Chinese economic officials reached a preliminary trade framework during talks in Kuala Lumpur on October 25-26, averting a feared escalation of their trade war and averting 100% tariffs on Chinese goods that had triggered a global market selloff just days earlier. The agreement, announced by U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, aims to stabilize bilateral trade tensions ahead of a high-stakes meeting between U.S. President Donald Trump and Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation (APEC) summit in South Korea on October 31, according to a U.S. News report.

The deal follows months of friction, including Trump's October 10 announcement of 100% tariffs on Chinese imports and Beijing's retaliatory restrictions on rare earth mineral exports. These measures had triggered a sharp selloff in global markets, with Bitcoin plummeting over 16% to below $105,000 and crypto exchanges reporting $19 billion in liquidations. However, the preliminary consensus restored investor confidence, sending Bitcoin surging 1.8% to $113,500 and lifting the total crypto market cap to $3.88 trillion, according to a BeInCrypto analysis.

The trade talks unfolded against the backdrop of the 47th ASEAN Summit, where Trump's presence has drawn both support and criticism in Malaysia. While some Malaysian business groups welcomed the U.S. president's focus on trade, others criticized his influence in regional diplomacy. Trump's attempt to position himself as a mediator in the Cambodia-Thailand border dispute has also sparked concerns, with Thai officials emphasizing the need for "practical, reciprocal" peace terms and cautioning against sidelining China's role in earlier ceasefire efforts, according to a Fulcrum article.

India's absence from the summit further highlighted regional diplomatic shifts. Prime Minister Narendra Modi opted for a virtual participation, citing Diwali celebrations, but analysts suggested strained U.S.-India relations—fueled by Trump's 50% tariffs on Indian goods and contentious claims about mediating India-Pakistan tensions—played a role in his decision. Modi's absence deprived India of opportunities to advance its "Act East" policy and engage with ASEAN and Quad partners, KMS News reported.

The U.S.-China trade framework addresses key sticking points, including China's rare earth export controls and U.S. technology export restrictions. While details remain under wraps, both sides agreed to delay escalatory measures and resume dialogue. "President Trump gave me great negotiating leverage with the tariff threat," Bessent stated, adding the framework would enable broader discussions on trade and economic cooperation, BeInCrypto reported.

The agreement has immediate implications for global markets. Cryptocurrencies, which had been disproportionately affected by trade uncertainties, saw a rebound as risk appetite returned. Ethereum rose past $4,040, and Solana surged 3.7%, reflecting optimism about reduced geopolitical risks, CryptoBriefing reported. Analysts noted that the resolution of U.S.-China tensions could pave the way for a broader crypto market recovery, though volatility remains if negotiations falter, Bitget reported.

Trump and Xi are expected to finalize the trade deal during their APEC meeting, with further negotiations planned before the Lunar New Year and the G20 summit in late 2025. For now, the preliminary consensus provides a reprieve for global markets, though underlying issues—such as China's compliance with the 2020 Phase One trade agreement and U.S. pressure on Beijing to increase purchases of American agricultural goods—remain unresolved, a U.S. News report said.

As Malaysia navigates its role as ASEAN chair, balancing Trump's diplomatic overtures with regional sensitivities, the success of the U.S.-China trade framework will hinge on its implementation. For crypto markets, the deal underscores the continued influence of macroeconomic and geopolitical developments—a reminder that stability between the world's two largest economies remains critical for risk assets, Coinotag noted.

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