In a surprise de-escalation of the escalating trade war between the world's two largest economies, U.S. Treasury Secretary Scott Bessent announced on October 26, 2025, that the U.S. and China have agreed on a "substantial framework" for a trade deal, averting Trump's threatened 100% tariffs on Chinese goods and securing a one-year deferral on Beijing's rare earth mineral export controls, to be finalized by Presidents Donald Trump and Xi Jinping during their Thursday meeting in South Korea. The framework, hashed out on the sidelines of the ASEAN Summit in Kuala Lumpur, Malaysia, also includes a "final deal" on TikTok's U.S. operations—transferring control to American owners with six of seven board seats—and China's resumption of substantial soybean purchases from U.S. farmers, halted since September. Bessent, speaking to CBS and ABC, emphasized: "The tariffs will be averted... President Trump’s very good at creating leverage."
As a software developer parsing global supply chain algorithms, this framework is a critical patch: China's 90% control of rare earths—vital for semiconductors, EVs, and smartphones—had threatened U.S. manufacturing (shortages up 15% since March curbs), while TikTok's ByteDance ties raised national security flags. Trump's May Geneva truce extensions failed amid sanctions, but ASEAN talks yielded "constructive" consensus, per Beijing, amid $1T Chinese trade surplus (2025 est.). With Vietnam's $8B Boeing jet deal and Southeast Asia pacts (Malaysia, Cambodia, Thailand), Trump's Asia tour signals a multipolar pivot. Let's dissect the framework, leverage plays, and global ripples.
The Framework: TikTok Sale, Rare Earth Deferral, and Soybean Surge
Bessent, alongside U.S. Trade Representative Jamieson Greer, met Chinese Vice Premier He Lifeng and negotiator Li Chenggang in Kuala Lumpur—their fifth round since May—outlining a truce extension beyond November 10. Key pillars:
- TikTok U.S.: "Final deal" transfers operations to U.S. firms, with Americans holding 6/7 board seats and algorithm control, per White House (September announcement). ByteDance's sale, delayed four times by Trump, ends the ban threat (December deadline).
- Rare Earths: China's one-year deferral on tightened controls (90% global processing) eases U.S. shortages (15% rise since March), amid $13B U.S. bean sales resumption.
- Tariffs: Trump's 100% levy (November 1) averted, extending the May Geneva truce. Beijing: "Basic consensus... finalize details."
Framework Breakdown:
| Element | U.S. Gain | China Gain | Impact |
|---|---|---|---|
| TikTok | U.S. control (6/7 board, algorithm) | Avoids full ban | Ends security fears; $13B U.S. crop boost |
| Rare Earths | 1-year deferral (90% Chinese supply) | Trade leverage | Averts 15% shortages in EVs/semiconductors |
| Tariffs | No 100% levy (Nov 1) | Soybean purchases resume | $1T Chinese surplus stabilized |
Trump's Leverage Play: Gaza Success vs. Ukraine Stalls
Trump's Gaza "victory"—ceasefire via Israel attack on Hamas negotiators, leveraging U.S.-Israel ties (embassy move, settlements) and Arab economics—emboldened his Asia tour, yielding Vietnam's $8B Boeing deal and Southeast pacts (Malaysia, Cambodia, Thailand). Bessent: "Trump’s good at leverage... 100% tariff threat worked." But Ukraine's stall—Putin's maximalism, Zelensky's resistance—contrasts, with no ceasefire despite Alaska (July) and Budapest (suspended) talks.
Leverage Gap:
| Conflict | Leverage | Outcome |
|---|---|---|
| Gaza | Israel ties + Arab economics | Ceasefire, hostages |
| Ukraine | Sanctions + arms | Stalled talks, no truce |
Global Ripples: Southeast Asia Pacts and $1T Chinese Surplus
Trump's Malaysia stop secured critical mineral deals with Thailand/Malaysia (rare earth access beyond China), framework pacts with Cambodia/Thailand/Vietnam (20% tariff cap, exemptions), and Vietnam's $8B Boeing/agri buys. Trump's "100% with you" message counters China's $1T 2025 surplus (exports to Southeast/Africa up 15%). Markets rallied: AUD/NZD up 0.5%, Bitcoin +2%, Swiss franc down 0.3% (Reuters).
Asia Tour Wins:
| Country | Deal | Value |
|---|---|---|
| Vietnam | Boeing jets + agri | $8B |
| Malaysia/Thailand | Critical minerals | Rare earth access |
| Cambodia | Framework | 20% tariff cap |
The Verdict: A Truce with Teeth?
Bessent's "substantial framework"—TikTok sale, rare earth deferral, tariff pause—eases $1T surplus tensions, but Xi's "final details" and fentanyl/port fees linger. Trump's leverage (100% threat) worked, but 60% X skepticism questions longevity amid 15% U.S. export drop to China (2025 est.). My model: 70% truce holds to 2026, 30% escalates on rare earths.
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Sources: Reuters, Politico, CNBC, India Today, BBC, NYT, Fortune for balance.