Air Force One is still on its way to East Asia, and a piece of news from Kuala Lumpur excited the Trump team. From October 25 to 26, after two days of intensive consultations between the Sino-US economic and trade teams in the Malaysian capital, Preliminary consensus was reached on core issues such as fentanyl control and reciprocal tariff arrangements。The United States announced that it would "no longer consider" imposing a 100% tariff on China.
Almost at the same time, two other pieces of news came out from Kuala Lumpur: Brazilian President Lula and Trump held face-to-face talks, and the two sides agreed to immediately start tariff negotiations; and India was also revealed to be quietly adjusting Russia's oil import strategy and moving closer to the United States.
The initial focus on trade consultations between the two sides was unexpectedly a turning point in resolving the trade conflict between the United States and many countries.
Kuala Lumpur Game: US Tariff Crisis Easing
This consultation between China and the United States can be called a "marathon negotiation". The first day of the talks lasted from 9: 00 a.m. to 6: 00 p.m., and the two sides had heated discussions on issues such as the 301 measures of the U.S. maritime logistics and shipbuilding industry with China, the extension of the suspension period of reciprocal tariffs, fentanyl cooperation and agricultural products trade.
There was a strong smell of gunpowder on the negotiating table。The US representative later revealed that the Chinese representative showed a firm stance during the talks and even ordered an investigation into Nvidia in English in person. When the US translator mistographed "those who play with fire self-immolation" as "curse of hell's fire", the Chinese representative did not point it out and watched and watched.
After five and a half hours of shaving, the two sides finally found a balance of interests.China Ministry of Commerce International Trade Negotiations Representative and Deputy Minister Li Zheng Steel “Primary Consensus” in four words summarizing the outcome of the talksIt seems to be easy to describe, and the actual amount of information is huge.
U.S. Treasury Secretary Bessent announced after the talks that the U.S. “no longer considers” a 100% tariff on China, and praised the two sides for establishing a “very successful framework”.
For Trump, this consensus was undoubtedly a "timely rain."After returning to the White House, he sought to "load and return" every time he visited the Middle East with more than a trillion dollars in investment and arms sales orders, and the European trip also reaped a lot.
On October 26, shortly after the end of the US-China consultation, Brazilian President Lula and Trump held face-to-face talks at the ASEAN Summit in Kuala Lumpur.
Lula revealed in a social media post after the meeting:"We agreed that the teams from both sides would meet immediately to push for a solution to the tariff and sanctions issues against Brazil." Trump also said he looked forward to reaching a "good agreement" with Brazil.
The U.S. has imposed tariffs of 50 percent on most of Brazil’s U.S. exports since August 6, covering key products such as coffee, beef and sugar, affecting about 57 percent of Brazil’s total exports to the U.S.
Brazilian Foreign Minister Vieira revealed that important consensus has been reached with the US: The United States will suspend its high tariffs during negotiations。 Vieira expects negotiations to be completed in the coming weeks.
The Brazilian Association of Meat Exporters said in a statement that “the mutual understanding between the two countries in Panama can maintain the competitiveness of Brazilian products and provide predictability for exporters.”
India adjusts strategy: Modi is revealed to plan to cut Russian oil imports
India has also quietly adjusted its strategy in the US-India trade game. According to people familiar with the matter, a number of Indian companies, including Reliance Industries Group, plan to reduce the daily purchase of Russian crude oil from 1.8 million barrels to 1.4 million to 1.6 million barrels starting in October.
This move is seen as a "moderate concession" by India to the United States.U.S. President Donald Trump signed an executive order on August 6 to raise tariffs on Indian imports of Russian oil to 50 percent.
Trade friction has had substantial impacts on India’s economy。Indian government data shows that in the first six months of this fiscal year, India imported 1.75 million barrels of Russian crude oil every day. Russia has become India's largest source of oil imports, accounting for about 36% of its total imports.
Trump has publicly stated many times recently that Modi has promised him to reduce oil imports from Russia. Although the Indian Ministry of Foreign Affairs did not fully confirm this, it pointed out that "safeguarding the interests of Indian consumers has always been our top priority."
Analysts believe that it will not be easy for India to immediately stop purchasing Russian oil, because a sudden shift to procurement from other countries will push up global oil prices and may trigger inflation. However, a moderate reduction in Russian oil imports may be the pragmatic way India has chosen to reduce U.S. tariff pressure.
There are multiple practical considerations behind the Trump administration's flexibility in trade policy.
The U.S. economy cannot afford the price of "full decoupling"。Internal calculations by the U.S. Department of Commerce show that if a 100% tariff is imposed on China goods, domestic prices in the United States will rise by 15%-20% in the short term. Among them, electronic products, daily necessities and other goods that rely on China's supply chain may increase by more than 30%.
In the agricultural field, since the escalation of the Sino-US trade war, U.S. soybean exports to China have dropped sharply by 40%. A large number of farmers are facing slow-moving difficulties. Protests have occurred in many agricultural states in the central and western regions.
Dependence in key areas also limits the tough stance of the United States. China controls more than 90% of the world's rare earth refining capacity. Rare earths are the "lifeblood" of high-tech industries and military industries in the United States. For example, China tightens exports in an all-round way. U.S. Semiconductor and Military Industry May Be At Risk of Stopping Production in 6 MonthsLosses could exceed $50 billion.
Domestic political pressure is also a reality that Trump must face. The U.S. midterm elections in November 2026 are getting closer and closer, and if the trade war continues to escalate and lead to an economic downturn, the Republicans may lose control of both Houses of Representatives.
Trump's choice to compromise in Kuala Lumpur was actually a pragmatic choice after weighing the pros and cons.
Chain reaction: why the global markets are breathing
The trade friction between China and the United States eased, and Brazil and India followed suit, letting the global market breathe a sigh of relief.
The preliminary consensus between China and the United States has greatly eased global trade tensionsThe Hong Kong South China Morning Post commented that the outcome of the Sino-U.S. talks marked the easing of tensions in the world's two largest economies.Reuters also noted that the Sino-U.S. trade war ceasefire encouraged the global markets.
U.S. tariffs on Brazilian commodities have begun to reshape global beef trade, pushing up U.S. domestic beef prices and promoting trade transfers through third countries such as Mexico.
India’s adjustment of Russian oil import strategy also has an impact on the global energy market. Data show that since the outbreak of the U.S. conflict in February 2022, India’s oil imports from Russia have surged from 0.2% to 35% or even 40% of total imports. India has saved about $17 billion by purchasing Russian oil at discounts. India’s adjustment of import strategy will reshape the global oil trade landscape.
Since this year, China's actual use of foreign funds has reached 5,737 billion yuan, and global capital has cast a vote of confidence in China's currency stability and market security.
In the next few weeks, as negotiations between Brazil and the United States begin and India formally adjusts its Russian oil import strategy, the Trump administration's multi-line trade war may gradually end. Global markets are waiting for the next good news: a possible meeting between the heads of state of China and the United States during the Asia-Pacific Economic Cooperation (APEC) meeting.
The world's two largest economies benefit from cooperation and lose from fighting. The good news from Kuala Lumpur has once again made the world see the possibility of win-win cooperation.
Source of information:
The two sides conducted "constructive" discussions around a number of important economic and trade issues, and China and the United States reached basic consensus in Kuala Lumpur consultations.
2025-10-27 06:29 · World Wide Web
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