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Title: October 31, 2025

GRAY ZONE BRIEF 31 OCTOBER  2025

***GZB TOP THREE

U.S. CHINA TRADE TRUCE 

U.S. President Donald Trump rounded off his six-day Asia trip on Thursday by reaching a framework trade agreement with Chinese President Xi Jinping in Busan, South Korea. Trump hailed the meeting as having been “truly great” and stressed that the U.S.-China relationship is “very, very important.” But the bigger winner out of Thursday’s talks appears to be Beijing, which used its near monopoly on rare earths and its purchasing power on U.S. soybeans to leverage trade wins from the White House. This optic may be an intentional by the White House as Asian culture is very different in regards to perception. To “lose face” (credibility, status, reputation) is the most embarrassing and unacceptable thing in As

Under the framework agreement, China and the United States agreed to a one-year pause on further trade hostilities, addressing a 90-day tariff suspension that was set to expire next month. As part of the deal, Trump backed down on his threat from just two weeks ago to raise tariffs by an additional 100 percent and instead halved Washington’s 20 percent fentanyl-linked levy, bringing down total U.S. duties on most Chinese goods from 57 percent to 47 percent.

In exchange, Xi agreed to suspend rare-earth export controls announced on Oct. 9 for at least one year. China dominates global rare-earth supply chains controlling around 85 percent of processing and 92 percent of magnet production, which are crucial to the U.S. military, semiconductor, and auto industries. However, the statement from China’s Ministry of Commerce about the agreement “did not address other critical mineral export controls that Beijing had issued prior to October—including ones on gallium and germanium, which are essential to semiconductors—and China still requires firms to secure export licenses for certain rare earths and magnets.”

China also agreed to resume buying American soybeans. Beijing was once the biggest foreign buyer of U.S. soybeans, but after Trump ignited his second-term trade war Xi effectively froze all new orders—severely hurting American farmers. 

Alongside rare earths and soybean sales, the trade framework outlines that China will begin purchasing U.S. liquified natural gas, particularly from Alaska, and both sides will suspend port fees that they imposed on each other earlier this month. Still, it’s important to note that since U.S.-flagged cargo ships barely ply the seas and don’t much unload in Chinese ports, that was not a big concession on Beijing’s part.

While much of Thursday’s talks centered on trade, Trump and Xi also discussed bilateral efforts to bolster collaboration to end the Russia-Ukraine war. Notably, though, talks did not center on Chinese purchases of Russian oil which Trump has long demanded that Beijing end; China was the biggest buyer of Russian crude last year.

*Note: The two leaders also did not discuss Taiwan.

This was the first in-person meeting between Trump and Xi since the U.S. president’s first term six years ago. Trump on Thursday confirmed that he plans to travel to China in April and that Xi will visit the United States next year.

U.S. LIMIT ON REFUGEES 

The Trump administration is restricting the number of refugees admitted annually to the United States to 7,500 and they will mostly be white South Africans, a dramatic drop announced Thursday that effectively suspends America’s traditional role as a haven for those fleeing war and persecution.

Why It Matters: 

The move cements a major shift in policy toward refugees that aligns with the Republican administration’s broader goals of keeping out foreigners whom it deems a risk to the nation’s security or a threat to U.S. jobs. That shift has meant increased immigration enforcement, in cities and at borders and entry points, in what’s become a vastly changed landscape in a country long seen as a beacon for migrants.

No reason was given for the specific new numbers, which were published in a notice on the Federal Register and are a steep decrease from last year’s ceiling of 125,000 set under Democratic President Joe Biden. The Associated Press previously reported that the administration was considering admitting as few as 7,500 refugees and mostly white South Africans. 

The notice said the admission of the 7,500 refugees during the 2026 budget year, which began Oct. 1, was “justified by humanitarian concerns or is otherwise in the national interest.” It made no mention of any other specific groups to be admitted besides the white South Africans, also known also as Afrikaners.

U.S. ARMY NATIONAL GUARD

An existing separate but similar structure, the National Guard Reaction Force, is expected to complete civil unrest training and be fully operational by April 1. The total size of the force will be 23,500 troops across all 50 states and three territories, excluding the District of Columbia, the documents say. Most states will supply 500 personnel for the reaction force, with the rest falling between 250 and 450.

*Note: Those forces are typically used for emergencies like disaster relief, not as on-call troops for civil unrest.

The mandate, along with the growing presence of federal and immigration enforcement officers, suggests further military deployments within the United States could grow in size and scope. The deployments, which President Donald Trump has described as a bid to quell violence and crime, have infuriated Democratic governors in multiple states, who have fought the president’s deployments through litigation.

GLOBAL SITREP 

UKRAINE 

Fight or flight. Nearly 100,000 Ukrainian men aged 18 to 22 have crossed the border into Poland since Kyiv relaxed rules for leaving Ukraine two months ago, according to new data from Poland’s border guard. By comparison, just 46,000 men in this age range had crossed the border in the first eight months of this year. The number of male Ukrainian refugees in Germany also increased to 1,400-1,800 per week in October, up from just 19 prior to August. Before the policy change, men between the ages of 18 and 60 were prohibited from leaving Ukraine.

*Note: I know one Ukrainian who will be crossing the Polish border back into Ukraine. 

IRAN’S NUKES & CHINA 

Iran's missile program. Iran is working on rebuilding its missile program with help from China, according to a CNN report which cited European intelligence sources. Since late September, when U.N. sanctions were reimposed on Tehran for failing to comply with the 2015 nuclear deal, Iran has reportedly received from China several shipments of sodium perchlorate, a key component in the production of solid propellant for Iran’s mid-range conventional missiles. The supplies were likely purchased after Iran’s 12-day war with Israel in June to help replenish Iranian weapons stockpiles. Several of the cargo ships and Chinese firms involved in the transactions are under U.S. sanctions.

U.S. ASKS AZERBAIJAN FOR TROOPS IN GAZA

U.S. request. The United States has reportedly asked Azerbaijan to contribute troops to an international stabilization force in the Gaza Strip. Baku has not yet made a decision on the matter but has made clear that it will participate only with a mandate in place approved by the U.N. Security Council, which would ensure international legitimacy and a clear framework for conduct.

U.S. & SOUTH KOREA

Economic injection. South Korea has agreed to invest $350 billion in the United States in exchange for tariff reductions on South Korean automobiles of 25 percent to 15 percent. The two countries struck the deal during U.S. President Donald Trump’s visit to South Korea this week. According to a White House fact sheet, the investment plan includes LS Group’s commitment to invest $3 billion by 2030 in the U.S. power grid infrastructure; Korean Air’s purchase of 103 new Boeing aircraft worth $36.2 billion; the South Korean Air Force’s selection of L3Harris Technologies to develop a new airborne early warning and control system aircraft in a $2.3 billion deal; a $5 billion joint investment program to modernize U.S. shipyards; cooperation in military ship maintenance, repair and overhaul, and the construction of new U.S.-flagged vessels; and the purchase by Korea Natural Gas Corporation of approximately 3.3 million tons annually of U.S. liquified natural gas.

ARMENIA 

EU support. The European Union will provide 5 million euros ($5.8 million) in funding to Armenia as part of a 2024 agreement to support nuclear safety in the country. The funds will be used to conduct stress tests at Armenia’s only nuclear power plant, to support capacity building for a nuclear regulatory committee, and to assist in assessing safety compliance. Meanwhile, Germany and Armenia held bilateral defense talks this week in Yerevan. Defense officials from both countries discussed cooperation initiatives for the coming year. Relatedly, it was also reported this week that Armenia is considering purchasing from India Su-30 fighter jets, developed by Russia and built by India’s Hindustan Aeronautics Limited.

GERMANY & TURKEY 

Trip to Ankara. German Chancellor Friedrich Merz arrived in Ankara to meet with President Recep Tayyip Erdogan. The meeting will focus on bilateral relations, Turkey’s accession process to the European Union, and cooperation in migration, energy, trade and security.

On the fence. Hamas has not yet made a decision on the disarmament issue, Hamas politburo member Mohammed Nazzal said in an interview. He added that the group has discussed the matter in talks with Turkish officials in Doha but considers it a national issue.

GZB INFOCUS: Government Debt to GDP by Country in 2025

Key Takeaways: 

            •          The global debt-to-GDP ratio rose 2.3 percentage points to 94.7% in 2025, but is still below the pandemic-era peak of 98.7% in 2020.

            •          Japan remains the world’s most indebted nation at 230% of GDP, followed by Sudan (222%) and Singapore (176%).

Global debt levels continue to rise, with 2025 marking another year of fiscal strain across both advanced and developing economies.

This map shows how much each country’s government debt compares to its economic output, measured as debt-to-GDP ratio, offering insight into fiscal resilience and vulnerability worldwide.

The IMF estimates the global average debt-to-GDP ratio at 94.7%, up from 92.4% the previous year.

While debt growth has slowed from the COVID-19 surge and high of 98.7%, elevated borrowing costs and sluggish growth are keeping public debt levels high.

Countries with the Highest Debt to GDP in 2025

At the top of the list, Japan holds a staggering 230% debt-to-GDP ratio, reflecting decades of fiscal stimulus and aging demographics.

Sudan (222%) follows, burdened by years of economic instability and conflict.

Singapore (176%), though high on the list, uses debt differently—largely tied to investment through its sovereign wealth funds.

Other high-debt countries include Venezuela (164%), Lebanon (164%), and Greece (147%), whose debt-to-GDP ratio has fallen significantly from its peak of 210% in 2020.

Government Debt in Advanced and Emerging Economies

Among advanced economies, average government debt stands near 113% of GDP, led by countries such as Japan (230%), Italy (137%), and the United States (124%).

In contrast, emerging markets average around 74%, with large economies like China (84%) and India (81%) driving much of the increase in recent years.

While emerging economies generally maintain lower ratios, rising global interest rates have intensified fiscal challenges, especially for nations reliant on external borrowing.

Pray.

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Stay informed.

Build resilient communities. 

—J.G.