US-China trade deal ‘done'; Musk says Trump comments went too far
Happy Thursday and welcome to your early morning wrap of the key business and political headlines from around the world.
First up, a trade deal between the United States and China is 'done', according to US President Donald Trump.
Reuters reports that negotiators from both sides have agreed on a framework to get a fragile trade truce back on track and remove Chinese export restrictions on rare earth minerals and other critical industry components.
Trump took to social media to confirm the deal, which is subject to final approval from him and President Xi Jinping.
"Full magnets, and any necessary rare earths, will be supplied, up front, by China,' he said on his social media platform Truth Social. 'Likewise, we will provide to China what was agreed to, including Chinese students using our colleges and universities (which has always been good with me!). We are getting a total of 55% tariffs, China is getting 10%."
A White House official said the 55% represents the sum of the 10% baseline 'reciprocal' tariff Trump has imposed on most of its trading partners; 20% on all Chinese imports that followed Trump's accusation the country, along with Mexico and Canada, facilitates the flow of fentanyl to the US; and the pre-existing 25% levies on Chinese imports Trump imposed during his first time in the White House.
Meanwhile, Wall Street's main indices were down overnight despite the preliminary trade truce and softer-than-expected inflation data.
The main indices were between 0.15% and 0.6% lower. The decline comes after a week of consistent gains, with the S&P 500 rising in six of the last seven days.
'Inflation in May was lower than anticipated, suggesting the tariffs aren't having a large immediate impact because companies have been using existing inventories or slowly adjusting prices due to uncertain demand,' Goldman Sachs Asset Management global co-chief investment officer of multi-asset solutions Alexandra Wilson-Elizondo told CNBC.
Donald Trump.
In other global news, signs are emerging that the worst of the feud between Elon Musk and Donald Trump is over.
According to the BBC, Musk posted on his social media platform X overnight that he regretted some of the posts he made about the president. 'They went too far.'
The two were caught in a war of words last week after the Tesla owner stepped back from his White House role and called Trump's tax bill a 'disgusting abomination'. He also made comments claiming that Trump appears in unreleased government files relating to the late sex offender Jeffrey Epstein.
In response, Trump said Musk had 'lost his mind' and threatened to cancel his government contracts, which are worth billions.
But overnight Trump told the New York Post he was open to reconciliation and there were no 'hard feelings'.
Elon Musk.
To Gaza, where Al Jazeera reports that the Palestinian death toll has eclipsed 55,000 since the Hamas-led attack in late 2023 killed 1,195 Israelis and foreign nationals.
At least 120 Palestinians have been killed and 474 injured in Israeli attacks across Gaza in the past 24 hours, according to the enclave's health ministry.
Closer to home, The Australian is reporting that the Pentagon has launched a review into the Aukus partnership to ensure the agreement is aligned with Donald Trump's 'America First' agenda.
In a statement to the newspaper, the Pentagon confirmed the review, noting that it was an initiative launched by the previous administration.
Under the Aukus arrangement, the US has agreed to provide Australia with between three and five nuclear-powered submarines. But concerns have emerged over whether the US industrial base can meet the target of producing the required 2.33 Virginia-class submarines per year – the rate needed to replace the boats sold to Australia.
Australia made the first $500m down payment to the US under the deal in February.
The Virginia-class fast-attack submarine USS Minnesota arrives at HMAS Stirling, Western Australia in early 2025. (Source: Wikimedia Commons.)
Finally, Brian Wilson, the frontman and co-founder of The Beach Boys, has died at the age of 82, according to the BBC.
"We are heartbroken to announce that our beloved father Brian Wilson has passed away," his family said in a statement shared online. "We are at a loss for words right now.'
Born in 1942 and raised in Hawthorne, California, Wilson formed a group along with his younger brothers Carl and Dennis, cousin Mike Love and friend Al Jardine. They went on to become one of the country's biggest rock bands, The Beach Boys.
Music magazine Rolling Stone ranked them at 12 on the list of the '100 Greatest Artists of All Time'.
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RNZ News
2 hours ago
- RNZ News
Trump's China 'truce' is nothing of the sort
Analysis by David Goldman , CNN Xi Jinping and Donald Trump. Photo: AFP Analysis: At long last, the United States has reached a trade agreement with China. Again. After a testy war of words that escalated into a tit-for-tat restriction on key exports, American and Chinese officials this week met in the United Kingdom with a singular goal: Find a way to agree to what they had agreed to a month earlier in Geneva. It appears the countries' top trade negotiators have accomplished that. On Wednesday (NZT) , both Chinese and Trump officials said they had agreed to a framework to implement the consensus they reached in May, and the trade truce would be sent to their respective leaders for their approval. Businesses, consumers and Wall Street investors will no doubt breathe a sigh of relief: Burdensome tariffs have raised significant anxiety, and easing trade barriers between the world's two largest economies should lower costs and help inject some much-needed certainty into an economy that has been demonstrating some signs of strain. President Donald Trump on Wednesday said in a Truth Social post that a "deal" with China has been completed. "Our deal with China is done," Trump said in his all-caps social media post. Trump said both countries agreed to ease export restrictions, per the prior arrangement agreed upon in Geneva in May. The president also confirmed on Wednesday in his post that the deal included "full magnets, and any necessary rare earths, will be supplied, up front, by China." But in reality, the trade truce - if that's really what was accomplished this time around - is mostly just a return to the already-tense state of affairs from before 2 April. Tariff rates from both countries remain historically high, and significant export restrictions remain in place. The United States has not opened its doors to China's autos, nor is it going to sell its high-end AI chips anytime soon. And, in Trump's parlance, China isn't treating America much more "fairly" after this agreement than it did before. Without a doubt, a trade agreement was much needed. After Trump's 2 April "Liberation Day" announcements, tensions ran so high that trade between the United States and China came to an effective halt. A 145 percent tariff on most Chinese imports made the math impossible for US businesses to buy virtually anything from China, America's second-largest trading partner. US Treasury Secretary Scott Bessent, America's chief negotiator in both trade talks with China, said previous tariff levels were "unsustainable." On 12 May, delegates from China and the United States announced they would significantly roll back their historically high tariffs on one another. Economists pared back their recession forecasts, and moribund consumer confidence rebounded. But Trump and his administration in recent weeks grew increasingly hostile toward China, accusing the country of breaking the promises it made in mid-May. China similarly said the United States failed to live up to its obligations under the Geneva agreement. The Trump administration had expected China to lift restrictions on rare-earth materials that are critical components for a wide range of electronics, but China has only very slowly allowed them to return to the open market, causing intense displeasure inside the Trump administration and prompting a series of export restrictions on US goods to China, three administration officials told CNN last month. China has a virtual monopoly on rare earths, without which cars, jet engines, contrast dye used in MRI machines and some cancer drugs cannot be manufactured. Trump told reporters Friday that Chinese President Xi Jinping had agreed to allow exports of rare earth minerals products to begin, but industry analysts said the crucial materials had not been flowing to the United States as they once had. If both countries satisfy the terms of the agreement this time around, the de-escalation should prevent the direst warnings about the trade war, including potential pandemic-level shortages. Despite the good vibes, the United States and China remain in an economic standoff. The Trump administration - and the Biden administration before it - have maintained that Chinese companies are more than happy to sell inexpensive products to the US market but that China places significant restrictions on US businesses operating in the country and encourages Chinese companies to steal American intellectual property. China has long disputed those claims. Trump, in his first term, raised tariffs on China based on national security concerns. Biden maintained many of those tariffs and doubled down on some. But the second Trump administration has taken trade barriers to an unprecedented level. It has placed a 10 percent universal tariff on virtually all goods coming into the United States. It put in place an additional 20 percent tariff on Chinese goods in an effort to get China to take action to reduce the flow of fentanyl over the US border. Both of those extraordinary tariffs remain in place on most Chinese goods, with the exception of some products like electronics. In addition, the White House closed the so-called de minimis exemption that allowed packages with a value of under $800 (NZ$1381) to come into the United States tariff-free. Hefty new tariffs remain in place on small packages, undermining the business models of Chinese ecommerce giants Shein and Temu. The compounding tariffs create significant trade barriers with America's second-largest trading partner, raising prices for American businesses and consumers with no easy fixes or clear market alternatives. Some gigantic companies, such as Apple, have complex supply chains that can withstand some of the price pressures. But even Apple, which has said it would ship most US iPhones from India as Chinese tariffs rise, said it would face a $900 million quarterly cost increase because of tariffs - at their current levels, not at the sky-high 145 percent rate. Other businesses, such as Boeing, have been completely shut out of China's market. Even without any tariffs or other formal barriers by China on purchases of US aircraft, Boeing has made virtually no sales in China, the world's largest for aircraft purchases, since 2019. But Trump sounded a hopeful note about the path forward. "President XI and I are going to work closely together to open up China to American Trade," Trump said in a post Wednesday morning. "This would be a great WIN for both countries!!!" A trade truce may be better than the alternative - if it lasts this time. But if the deal leads to reduced trade barriers, that could boost both economies. -CNN
National Business Review
2 hours ago
- National Business Review
One survivor reported after Air India crash; UK economy contracts
Ata mārie and welcome to your Friday recap of the main international business and political headlines. In developing news, Al Jazeera reported on the crash of an Air India plane bound for London. It crashed into a medical college in the city of Ahmedabad shortly after takeoff, killing at least 240 people. It was reported that there was one survivor among the passengers. That person was rushed to hospital for treatment. Officials said medical students at the college hostel were among the dead. Air India said it was working with local authorities on the emergency response, while it was still too early to identify the cause of the crash. Boeing, the manufacturer of the 787-8 Dreamliner, said it was in contact with Air India and 'ready to support them'. Elsewhere, China is ready to drop tariffs on imports from 53 African nations, the BBC reported. China has been Africa's largest trading partner for 15 years. Africa's exports to China were worth about US$170 billion in 2023. A joint statement criticised "certain countries' [efforts to] disrupt the existing international economic and trade order" through the unilateral imposition of tariffs, the BBC noted. Yesterday, it was reported that a trade deal between the United States and China had been 'done', according to US President Donald Trump. Reuters reported that negotiators from both sides had agreed on a framework to get a fragile trade truce back on track and remove Chinese export restrictions on rare earth minerals and other critical industry components. Federal Reserve chair Jerome Powell. Meanwhile, pressure between Trump and Federal Reserve chair Jerome Powell intensified after Trump called him a 'numbskull', and repeated a call to cut interest rates, CNBC reported. Trump claimed that lowering rates by two percentage points would save the US US$600b each year. 'We can't get this guy to do it.' 'We're going to spend US$600b a year…because of one numbskull that sits here [and says] 'I don't see enough reason to cut the rates now,'' Trump said. Staying with economics, the UK economy contracted by 0.3% in April, as businesses slashed jobs and shelved investment plans in response to higher taxes and global trade tariff uncertainty, the Guardian reported. Official data showed the economy fell after expanding 0.2% in March and 0.5% in February. The contraction was the worst monthly drop since October 2023. Chancellor Rachel Reeves refused to rule out future tax rises and acknowledged the latest figures were 'clearly disappointing', she told the BBC. 'No chancellor is able to write another four years of Budgets within a first year of government, you know how much uncertainty there is in the world at the moment.' Elon Musk. Over the Ditch, the ABC reported that Tesla drivers had reported 'phantom' braking in autopilot mode, with the electric cars slowing down for no particular reason while driving. Allegations of phantom braking led to legal action overseas and the Australian class action against Tesla was due to return to the Federal Court later this year. Tesla said autopilot mode was designed to make driving safer, but in the US, Tesla was sued over several deadly crashes after the system was enabled, the ABC said. It was reported that Elon Musk's company had settled some cases but not admitted wrongdoing and blamed driver error. About 10,000 Tesla drivers in Australia had registered their interest in a class action against the company, with allegations that consumers were misled over phantom braking, battery range, and self-driving capability, the ABC reported.
RNZ News
2 hours ago
- RNZ News
United Nations overwhelmingly demands immediate Gaza ceasefire over US, Israel opposition
By Michelle Nichols , Reuters Palestinian Ambassador to the United Nations Riyad Mansour speaks during a meeting of the UN General Assembly. Photo: AFP / Charly Triballeau The United Nations General Assembly have overwhelmingly demanded an immediate, unconditional and permanent ceasefire in the war in Gaza and aid access, after the United States vetoed a similar effort in the Security Council last week. The 193-member General Assembly adopted a resolution that also demands the release of hostages held in Gaza by Hamas, the return of Palestinian prisoners detained by Israel and the full withdrawal of Israeli forces from Gaza. The text garnered 149 votes in favour, while 19 countries abstained and the US, Israel and 10 others voted against. The resolution "strongly condemns the use of starvation of civilians as a method of warfare and the unlawful denial of humanitarian access and depriving civilians ... of objects indispensable to their survival, including wilfully impeding relief supply and access." Israel's UN Ambassador Danny Danon told the General Assembly this was "blood libel." He had urged countries not to take part in what he said was a "farce" that undermines hostage negotiations and fails to condemn Hamas. "It must be acknowledged that by failing to condition a ceasefire on the release of the hostages, you told every terrorist organization that abducting civilians works," he said. General Assembly resolutions are not binding but carry weight as a reflection of the global view on the war. Previous demands by the body for an end to the war between Israel and Palestinian militants Hamas have been ignored. Unlike the UN Security Council, no country has a veto in the General Assembly. Libya's UN Ambassador Taher El-Sonni told the General Assembly before the vote that for "those pressing the red button today to vote against this resolution (it) will become a blood stain on their fingers." The US last week vetoed a draft UN Security Council resolution that also demanded an "immediate, unconditional and permanent ceasefire" and unhindered aid access in Gaza, arguing it would undermine US-led efforts to broker a ceasefire. The other 14 member states voted in favour of the draft as a humanitarian crisis grips the enclave of more than 2 million people, where the UN warns famine looms and aid has only trickled in since Israel lifted an 11-week blockade last month. Acting US Ambassador Dorothy Shea told the General Assembly before the vote that the resolution "does nothing to free the hostages, improve the lives of civilians in Gaza, or bring us closer to a ceasefire, and is yet another performative action that erodes the credibility of this body." The vote came ahead of a UN conference next week that aims to reinvigorate an international push for a two-state solution between Israel and the Palestinians. The US has urged countries not to attend. In October 2023, the General Assembly called for an immediate humanitarian truce in Gaza with 120 votes in favour. In December 2023, 153 countries voted to demand an immediate humanitarian ceasefire. Then in December 2024, it demanded - with 158 votes in favour - an immediate, unconditional and permanent ceasefire. The war in Gaza has raged since 2023 after Hamas militants killed 1200 people in Israel in an 7 October attack and took some 250 hostages back to the enclave, according to Israeli tallies. Many of those killed or captured were civilians. Israel responded with a military campaign that has killed over 54,000 Palestinians, according to Gaza health authorities. They say civilians have borne the brunt of the attacks and that thousands more bodies have been lost under rubble. -Reuters
