Trump’s China Deal Backfires as Sino-Russian Ties Deepen Amid Trade Shifts
When Donald J. Trump sat down with Xi Jinping in Busan on October 30, 2025, he thought he’d pulled off a masterstroke. The 100-minute meeting at the Asia-Pacific Economic Cooperation (APEC) summitBusan yielded a sweeping trade truce: China agreed to suspend its October 9 export controls on rare earths, gallium, germanium, antimony, and graphite — critical inputs for semiconductors, EVs, and defense tech — while rolling back retaliatory tariffs on $120 billion in U.S. agricultural goods. In return, the U.S. paused its Section 301 investigations targeting China’s maritime and shipbuilding sectors for one year, starting November 10, 2025. Trump called it a "12 out of 10" win. But behind the headlines, the real story wasn’t about trade. It was about what this deal revealed — and what it failed to break.
The Nixon Gambit That Never Was
Trump’s team openly framed the Busan breakthrough as a "reverse Nixon" strategy — a Cold War-era playbook where President Richard Nixon exploited Sino-Soviet tensions to isolate Moscow. The logic was simple: if China could be wooed away from Russia with economic incentives, the Kremlin’s global leverage would crumble. But the timing couldn’t have been worse. Just weeks before the Busan meeting, on September 2, 2025, Vladimir Putin and Xi Jinping held back-to-back talks in Beijing — one at the Great Hall of the People, another at Xi’s private residence — during Victory Day celebrations. The two leaders didn’t just shake hands. They signed 17 agreements: expanding nuclear energy cooperation, deepening joint research in AI and quantum computing, launching a new agricultural initiative, and — critically — announcing reciprocal visa-free travel for citizens, effective September 15, 2025.Then came the kicker: Putin pledged $2 billion in free aid and $10 billion in loans to launch a Shanghai Cooperation Organization (SCO) development bank. This wasn’t symbolic. It was institutional. A financial pillar for a non-Western economic bloc, designed to bypass SWIFT and dollar dependency. Trump’s trade deal didn’t fracture the partnership. It made it look like the West was the unstable one.
Why China Won’t Abandon Russia
The assumption that China sees Russia as a liability is dangerously naive. Dr. Dmitri Trenin, Director of the Carnegie Moscow Center, put it bluntly in the NEST Centre’s analysis: "Putin will look to exploit Trump’s weaknesses — vanity, ignorance, naivete — to secure a deal that undermines U.S. and European foreign policy." China isn’t just tolerating Russia; it’s leveraging it. With Western sanctions strangling Russian tech imports, Beijing has become Moscow’s sole reliable supplier of microchips, machine tools, and precision components. In return, Russia supplies China with 80% of its crude oil imports and vast tracts of Siberian farmland for grain cultivation.And then there’s the border. A 4,300-kilometer shared frontier that demands mutual security. Russia’s military is stretched thin in Ukraine. China’s navy is expanding in the Pacific. Neither can afford to alienate the other. "Russia cannot afford to allow relations with China to degrade," the NEST Centre noted. "Mutual security reassurance, China’s multiplier effect on Russian global influence, close economic ties, and defense cooperation — these aren’t temporary fixes. They’re structural."
The Real Winner: China’s Global Image
While Trump was busy boasting about "opening China’s markets," Beijing was quietly rebranding itself. In an October 31 interview with Meduza, China expert Dr. Elena Ivanova observed: "The Chinese know this. Far from being anxious that Russia may re-orientate its foreign policy, they are confident the partnership will be as strong as ever — and may even expand further. The mayhem unleashed by Trump has allowed China to promote itself as the guardian of international order."That’s not rhetoric. It’s policy. While the U.S. imposed unilateral tariffs and threatened Europe with 100% levies on countries trading with Russia, China quietly expanded its trade agreements with Brazil, Saudi Arabia, and Indonesia. Its rare earth export controls — which Trump "suspended" — were never meant to hurt America. They were a bargaining chip to force Western firms to diversify supply chains away from the U.S. Now, with those controls lifted temporarily, China has already secured long-term contracts with Japanese and South Korean manufacturers. Meanwhile, U.S. farmers are left wondering: if this deal collapses next year, will China’s tariffs return with a vengeance?
What’s Next? The SCO Bank and the New Cold War
The real threat isn’t a bilateral trade deal. It’s the institutional architecture growing beneath it. The SCO development bank will begin operations in early 2026, with China and Russia as its primary shareholders. Iran and Belarus are expected to join as founding members. This isn’t just about loans — it’s about creating an alternative financial system, one that settles trade in yuan, ruble, and gold. The Brookings Institution warned in its November 2025 report: "China has now begun to develop a full-fledged export control regime, not just for rare earths but for a wide range of critical materials and technologies."That means the U.S. isn’t just losing market access — it’s losing technological leverage. When China controls 95% of global rare earth processing and 60% of lithium refining, and Russia supplies 25% of the world’s palladium, the idea that a single trade deal can reset the balance of power is fantasy. The Atlantic Council’s warning about a "China-Russia-Iran-North Korea bloc" isn’t alarmist. It’s already happening — and Trump’s trade concessions are making it harder to counter.
The Irony of Economic Thaw
The most bitter twist? Trump’s team thought they were winning by easing pressure. Instead, they gave China cover to accelerate its decoupling from the West. The $2.3 billion in U.S. soybean exports that will flow into China in 2026? That’s a drop in the bucket compared to the $20 billion in tech and energy exports China is now locking into long-term deals with Russia and the Global South.And here’s the quiet truth: China didn’t need Trump’s deal to survive. It needed him to look desperate. And now, he does.
Frequently Asked Questions
How does Trump’s trade deal with China affect U.S. farmers?
U.S. farmers will see a temporary boost, with tariffs on soybeans, pork, and corn reduced from 57% to near zero. But the suspension is only for one year, and China has already secured alternative suppliers in Brazil and Argentina. If talks collapse in 2026, retaliatory tariffs could return even higher. The relief is real — but fragile.
Why didn’t China demand more in return for lifting export controls?
China didn’t need to. The export controls were never about punishing the U.S. — they were leverage to force global companies to diversify supply chains away from American dependence. By lifting them temporarily, China made the U.S. look eager while locking in long-term contracts with Japan, South Korea, and Germany. The real win was strategic positioning, not immediate sales.
Is the Sino-Russian partnership really stronger than ever?
Yes. Beyond the visa-free policy and SCO bank, the two countries conducted 14 joint military exercises in 2025 — double the number from 2024. They’ve also launched a shared satellite navigation system and are co-developing a next-generation nuclear reactor. These aren’t gestures. They’re foundations of a new geopolitical axis.
What does this mean for Europe’s energy policy?
Trump’s call for Europe to impose 100% tariffs on oil from China and India has backfired. Europe’s energy prices are already rising as Russian crude flows through China’s refineries and is re-exported as diesel and gasoline. With the SCO bank funding infrastructure, Russia is bypassing European markets entirely. Europe’s attempt to isolate Russia is now subsidizing its rivals.
Could the U.S. reverse this trend?
Only by abandoning transactional diplomacy. China and Russia aren’t reacting to tariffs — they’re building alternatives. To compete, the U.S. needs to invest in domestic rare earth processing, secure long-term mineral deals with Australia and Canada, and rebuild trust with allies through multilateral frameworks — not threats. Right now, it’s doing the opposite.
What’s the timeline for the next major flashpoint?
November 10, 2026 — the day the U.S. Section 301 suspension expires. If no new deal is reached by then, Washington is expected to impose sweeping restrictions on Chinese shipbuilding tech and AI chips. But by then, China’s SCO-aligned partners will be far less dependent on U.S. markets — making any retaliation far less effective.
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