While US President Donald Trump’s Asian tour and new trade agreements are expected to deliver clear advantages to the United States, uncertainty looms over what benefits the participating Asian nations will actually receive. Experts caution that the deals, which Trump has hailed as “historic,” remain clouded by ambiguity and imbalance. Since arriving in Kuala Lumpur on Sunday, Trump has signed trade pacts with Malaysia and Cambodia and announced outlines for similar agreements with Thailand and Vietnam. The deals aim to eliminate several tariff and non-tariff barriers for US exports, creating significant opportunities for American businesses. However, analysts note that the four Southeast Asian nations have secured little in return.
Despite negotiations, these countries failed to achieve any reduction in the steep 19–20% tariff rates initially imposed by Washington. Only limited tax concessions have been granted for select exports from Cambodia and Malaysia, offering minimal relief. According to Bloomberg Economics, the agreements are largely unilateral, offering clear advantages to the US while leaving Southeast Asia exposed to potential losses. As the pacts allow greater access for US goods, regional industries may face heightened competition and pressure. Without reciprocal benefits, these deals could ultimately threaten local manufacturing sectors across Southeast Asia.
Trump to meet Xi Jinping in South Korea
The much-anticipated meeting between US President Donald Trump and Chinese President Xi Jinping will take place tomorrow in South Korea as part of renewed efforts to end the prolonged trade war between the world’s two largest economies. Trump left for Seoul earlier today after a brief stop in Japan, where discussions had already begun on limiting China’s dominance in the rare earth minerals sector. According to reports, Trump’s strategy to pressure Beijing into curbing its exports of rare earth minerals has already achieved partial success even before the meeting. China has reportedly signalled its readiness to compromise during preliminary talks held between US and Chinese representatives in Malaysia. Beijing has agreed in principle to suspend new export restrictions on rare earths for one year, a gesture seen as a major step towards a possible trade deal.
Currently, China accounts for the bulk of global rare earth mining and exports. These minerals are crucial for a wide range of high-tech industries, from defence and electric vehicle (EV) manufacturing to solar panels, aviation, and space missions. The United States remains heavily dependent on China for its supply, and Beijing’s earlier tightening of export rules had angered Washington.
In response, Trump had warned that if China restricted supplies, the US would impose additional duties of up to 155 per cent on Chinese products and block access to American software. Simultaneously, Washington intensified efforts to secure alternative supplies from countries such as Australia and Japan, further pressuring Beijing to negotiate. Trump is now optimistic that his talks with Xi will yield a breakthrough and lead to the formal announcement of a new US–China trade deal. Analysts believe that an agreement would mark a significant turning point for global trade, restoring stability to industries, stock markets, and currencies worldwide.
Rare Earths, Soybeans, and the fentanyl crisis
Although rare earth minerals and tariff issues remain key topics, the central focus of the Trump, Xi summit is expected to be two other contentious issues, the US fentanyl crisis and China’s boycott of American soybeans.Trump has repeatedly accused China of allowing the smuggling of fentanyl, a synthetic opioid painkiller, into the United States both directly and through intermediary countries. Fentanyl abuse has led to tens of thousands of deaths annually in the US, making it a major domestic concern. Trump is likely to urge Xi to take stricter action to curb the production and export of the drug.
Another major point of friction is China’s suspension of soybean imports from the United States. The move has severely hurt American farmers, who were once heavily dependent on exports to the Chinese market. In recent months, Beijing has shifted purchases to Argentina and other countries. Trump is expected to press Xi to end the boycott and resume soybean imports as part of a broader trade reconciliation package. Preliminary negotiations in Malaysia reportedly ended on a positive note, with both sides exchanging handshakes and optimistic statements. This has strengthened market sentiment that a comprehensive trade deal could be announced during the Xi–Trump meeting. If negotiations fail, Trump’s proposed 100–155 per cent “thunderstorm” tariff on Chinese imports is set to take effect from November 1. China, aware of the economic risks, is keen to avoid this outcome and has shown unusual flexibility in recent rounds of discussion.
Federal reserve set to cut interest rates
Adding to the buoyant global mood, the US Federal Reserve is expected to announce another interest rate cut later today (Indian time). Market surveys unanimously predict a reduction of 0.25 per cent, following a similar cut in the previous meeting. A lower interest rate will reduce borrowing costs for individuals and businesses, stimulate credit demand, and boost overall economic activity. Expectations of this policy move have already lifted Wall Street, with major indices posting modest gains overnight.
The Dow Jones Industrial Average rose 0.34 per cent, the Nasdaq Composite gained 0.80 per cent, and the S&P 500 advanced 0.23 per cent. Investor optimism has been further bolstered by strong quarterly earnings from leading US companies such as Apple, Amazon, Microsoft, Alphabet, and Meta. Dow Jones futures slipped 0.07 per cent, S&P 500 futures remained flat, while Nasdaq futures edged up 0.02 per cent.
Asian markets mirrored global optimism, with Japan’s Nikkei index climbing 1% to a new record high, buoyed by positive developments surrounding the Xi–Trump summit and the Fed’s expected rate cut. South Korea’s KOSPI gained 0.17 per cent, while China’s Shanghai Composite rose 0.12 per cent. The Hong Kong Composite Index slipped 0.33 per cent, reflecting caution among investors awaiting the summit outcome.In contrast, Australia’s ASX200 index fell 0.73 per cent after inflation rose sharply to 3.2 per cent from 2.1 per cent, prompting concerns over potential monetary tightening. In Europe, the FTSE index gained 0.44 per cent, while Germany’s DAX declined 0.12 per cent, with investors awaiting US policy signals before taking new positions.
Indian market outlook; Gold prices in flux
In India, the Sensex and Nifty indices had slipped yesterday due to profit-taking, but early morning trends indicate a recovery. The Gift Nifty rose 50 points, signalling that both benchmarks could return to positive territory. Metal and public sector bank stocks are expected to lead the rally following speculation that the central government may ease foreign equity participation norms for foreign institutional investors (FIIs), particularly in light of improving global trade sentiment. Several major companies, including LIC Housing Finance, RailTel Corporation, PB Fintech, BHEL, NTPC Green Energy, Coal India, L&T, HPCL, SAIL, and NMDC, are set to announce their quarterly results today, which could inject additional volatility into the markets.
Gold prices have seen sharp fluctuations amid uncertainty surrounding the US–China talks. International gold fell from above $4,000 to $3,931 per ounce, rebounded to $3,982, and then slipped again to $3,951 by morning trade, a decline of $54.This pattern indicates a possible dip in domestic gold prices today. Analysts suggest that in India, the price of gold could fall below ₹88,000 per 8 grams if the summit concludes positively and global risk appetite improves.
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