US-China Trade Deal Reached Amid Skepticism

Global market confidence in U.S.-China trade talks has faltered after President Donald Trump's statement that a trade deal was "done" was later contradicted by Commerce Secretary Howard Lutnick, who said U.S. levies on Chinese goods won't change. European markets are expected to open lower, with FTSE, DAX, CAC 40, and FTSE MIB all projected to decline. The U.K.'s monthly GDP print and earnings from Tesco are upcoming data releases to watch.

US President Trump announced that a trade deal with China is "done" after senior US and Chinese trade representatives reached a "framework deal" in London. The agreement, subject to final approval from Trump and Chinese President Xi Jinping, would maintain current tariffs of 10% on US goods by China and 55% on Chinese imports by the US. The deal aims to ease the trade war between the two economies, with China agreeing to supply rare earths to the US and the US allowing Chinese students to attend American colleges. The agreement builds on a previous deal reached in Geneva in May, which put retaliatory tariffs on hold for 90 days. China's government has not confirmed the terms or whether President Xi will sign off on the deal.

Asia-Pacific markets traded mixed as investors reacted to US President Donald Trump's statement that a trade deal with China was "done." Japan's Nikkei 225 fell 0.58%, while South Korea's Kospi rose 0.83%. Hong Kong's Hang Seng index declined 0.51%, and mainland China's CSI 300 was flat. US stock futures fell as traders weighed the trade agreement and new inflation data, with S&P 500 futures down 0.2%. The US consumer price index rose less than expected in May, climbing 0.1% for the month. Trump's trade deal comments and tariff announcements unsettled investors, with some analysts noting that the 55% tariffs on Chinese imports would remain in place. Other news included Japan's manufacturers' sentiment falling to its lowest in five quarters due to trade uncertainties, and the US dollar index weakening to its lowest since April.

U.S. stocks fell on Wednesday despite positive news on trade and inflation, with the S&P 500 and Nasdaq Composite losing 0.27% and 0.5% respectively. The U.S. consumer price index for May came in at 0.1%, lower than expected, and Commerce Secretary Howard Lutnick stated that current U.S. tariffs on China will not change again. However, investors remain wary due to the volatile tariff situation and potential future price increases. JPMorgan Chase CEO Jamie Dimon expressed concerns that the U.S. economy may deteriorate soon, while Elon Musk apologized for his recent posts about President Donald Trump. The FTSE 100 hit a record level, and Asia continues to move away from the U.S. dollar.

Stock futures fell on Thursday after the S&P 500's three-day winning streak ended, with the index down 0.3%. Oracle's shares surged over 7% in extended trading after the company reported better-than-expected fiscal fourth-quarter results. Investors are awaiting the release of the producer price index and developments on trade talks between the US and China, as well as rising tensions between the US and Iran. The US Treasury Secretary suggested that the Trump administration may extend the tariff pause for countries negotiating in good faith. The S&P 500 remains just over 2% below its late February record high.

The US and China reached a tentative trade agreement after tense negotiations in London, effectively reverting to the pre-April status quo. The deal involves maintaining current tariffs, loosening Chinese restrictions on rare earth mineral exports, and relaxing US limits on technology exports. However, analysts question the effectiveness of the Trump administration's aggressive trade tactics, suggesting they may have backfired and ultimately achieved little. The agreement did not address other trade issues, which will be left for future discussions. Experts argue that the US has set a concerning precedent by using export controls as economic leverage, potentially opening the door for China to demand similar concessions in the future.

US President Donald Trump announced that a wide-ranging trade deal had been reached with China after two days of talks in London, covering issues such as rare earth minerals, student visas, and tariffs. However, Chinese officials were more reserved, stating only that they would submit a report to President Xi Jinping for approval, without providing further details on the agreement.

US President Donald Trump announced that a deal with China is "done" regarding rare earths, subject to final approval from him and China's President Xi Jinping. The agreement follows two days of talks in London, where top officials from both countries discussed resolving conflicts that emerged since a truce was agreed in May. China will supply US companies with magnets and rare earth metals, while the US will walk back its threats to revoke visas of Chinese students. The deal's details are limited, and it is not expected to alter the broad outlines of the May truce. US officials said the agreement is a framework to implement the Geneva consensus, and once approved, it will be implemented. The announcement had a muted effect on markets, with some analysts describing the deal as having "very limited scope and unfinished status".

The US and China have agreed on a plan to roll out a trade truce after days of negotiations in London. CNN's Phil Mattingly explained what brought both sides to the table and where the relationship goes from here, discussing China's 'trump' card in the US trade war.

The White House said President Donald Trump remains "receptive" to dialogue with North Korean leader Kim Jong Un despite reports that Kim rejected a letter from Trump. White House press secretary Karoline Leavitt stated that Trump would like to see progress built on their 2018 summit in Singapore before moving forward with further correspondence.

US President Donald Trump's travel ban on 12 countries, including Myanmar, and partial restrictions on seven others, including Laos, has been criticized for being "nonsensical" and potentially damaging US-Southeast Asia ties, as it may worsen conflict and push the region towards China.

The U.S. has imposed export controls on advanced semiconductors used in AI development, restricting China's access to critical components and technology across the semiconductor value chain. In response, China has invested tens of billions of dollars to develop domestic alternatives. China's progress varies across different segments: in AI chip design, Huawei's HiSilicon is making significant strides, with its Ascend 910B and 910C chips narrowing the performance gap with Nvidia. However, China's chip fabrication capabilities, led by SMIC, lag behind TSMC, and are hindered by the lack of advanced chipmaking equipment from ASML due to export controls. China has found workarounds, but yields are poor and scalability is limited. In AI memory components, China still trails behind industry leaders like SK Hynix. Overall, while China has made breakthroughs in some areas, it still faces significant challenges in creating a competitive AI chip ecosystem.

The US has used export controls to slow China's development of cutting-edge technologies, particularly those with military applications, such as semiconductors and artificial intelligence, over the past decade. The controls began under President Trump, who first used them in 2018 to target Chinese tech companies like ZTE and Huawei. The Biden administration expanded these controls, shifting the focus from specific companies to constraining China's overall advancement in key technologies. The Biden administration tightened controls on chip sales to China and pressured allied companies like ASML to stop selling equipment to Chinese chip firms. Since returning to office, Trump has continued to adjust export controls, ending a rule governing the sale of American-made AI chips to foreign countries and taking steps to crack down on chip sales to China by companies like Nvidia.

China has seen a surge in graduates with expertise in AI and chip technology, driven by the government's efforts to boost the sector amid a tech trade war with the US. The number of universities offering AI-related majors has grown from 35 in 2019 to over 535, producing a large pool of talent that is giving China a competitive edge. According to Morgan Stanley, nearly half of the world's top AI researchers are from China, and the country is poised to become a leader in the field. Graduates like Jack Wang, who enrolled in a microelectronics program in 2019, are now ready to join the workforce and drive China's hi-tech engine.