Trump-Xi call fuels market optimism but US stocks slip on Musk row

NEW YORK: Wall Street closed lower Thursday as a spat between President Donald Trump and his billionaire former aide Elon Musk spilled into the public eye, but global markets were mixed while investors assessed trade talks between Washington and Beijing.
Major US indexes fell, with shares in Musk's electric vehicle company Tesla tanking more than 14 percent as the US leader threatened to tear up the tycoon's government contracts.
Trump expressed disappointment Thursday with his top donor's criticisms of a 'big, beautiful' spending bill before Congress, prompting Musk to hit back in real time.
But markets were 'holding up reasonably well' otherwise, said Patrick O'Hare of Briefing.com.
Earlier Thursday, Trump and Chinese President Xi Jinping held a long-awaited call focused almost entirely on trade.
'The call lasted approximately one and a half hours, and resulted in a very positive conclusion for both Countries,' Trump said on his Truth Social platform. He added that US and Chinese teams would hold a new meeting 'shortly.'
The market 'initially took a positive view of that call,' O'Hare said. This was 'largely because it seemed that the tone of the call was more conciliatory than combative.'
Previously, the world's two biggest economies blamed each other for jeopardizing a temporary truce in their escalating tariffs war.
City Index and FOREX.com analyst Fawad Razaqzada said markets hoped the direct line between Washington and Beijing could ease trade tensions, even if momentarily.
But he added: 'It is super important that the Trump-Xi call now leads to some concrete movement.'
Since his return to the White House, Trump has launched wide-ranging tariffs including a 10 percent levy on most US trading partners, while subjecting goods from China to elevated rates.
- Euro boost -
Meanwhile, the euro got a boost from the European Central Bank signaling an end to its rate-cut cycle.
European stock markets closed mixed even though the ECB cut its key deposit rate a quarter point to two percent, as expected.
It was its eighth reduction since June last year when it began lowering borrowing costs.
But ECB President Christine Lagarde stated the central bank is 'getting to the end' of the rate-cutting cycle.
That sent the euro surging against the dollar and European stocks gave up earlier gains.
The ECB's series of cuts stands in contrast to the US Federal Reserve, which has kept rates on hold recently amid fears that Trump's levies could stoke inflation in the world's top economy.
Investors are now looking to the release on Friday of US payrolls data, which could have a bearing on monetary policy.
Other data has been mixed. April jobs openings data beat expectations but according to payroll firm ADP, private sector jobs rose by only 37,000 last month, slowing from April.
Another survey showed activity in the US services sector contracted in May for the first time since June last year.
The readings stoked concerns that the US economy was stuttering.
The readings ramped up bets on a Fed cut, with markets pricing in two by the end of the year, starting in September.

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EU pushes China to address ‘alarming' rare earth export controls

The Star

an hour ago

The Star

EU pushes China to address ‘alarming' rare earth export controls

The EU has urged China to stop restricting the export of rare earth minerals and magnets, with the bloc's trade chief saying its industries are in an 'alarming situation'. The request was made during a meeting between the sides' top commerce officials in Paris on Tuesday. It comes as sectors across Europe raise the alarm about a shortage of rare earths, which are used to manufacture hi-tech goods ranging from electric cars and smartphones to military tanks and aircraft. 'I informed my Chinese counterpart about the alarming situation in the European car industry, but I would say industry as such because clearly rare earths and permanent magnets are absolutely essential for industrial production,' Maros Sefcovic said on Wednesday, briefing reporters a day after his meeting with Chinese Commerce Minister Wang Wentao. Around 90 per cent of the world's supply of rare earth minerals comes from China, which introduced export controls on their shipments in April in retaliation to US President Donald Trump's 'reciprocal' tariffs. Rare earths consist of 17 elements. On April 4, Beijing added seven of these – dysprosium, gadolinium, lutetium, samarium, scandium, terbium and yttrium – to its export control list, plus several rare earth magnets, two days after Trump announced 'reciprocal tariffs', meaning licenses are now required for their export. While such restrictions were ostensibly intended to punish the US, firms around the world have been caught in the crossfire. Business chambers and industry groups have urged European governments to push for a solution, as mineral stocks run low and some areas of production grind to a halt. European companies have complained that China's commerce ministry seemed incapable of handling the voluminous requests, with licenses being issued slowly and on a piecemeal basis. 'Some applicants are asked for sensitive information that might compromise their intellectual property so they're reluctant to hand that over, but they need to if they want to get approval,' Adam Dunnett, secretary general at the EU Chamber of Commerce in China, said. The chamber has held 'emergency meetings' with Chinese authorities in recent days after an outpouring of anxiety from across European industry. 'I haven't seen anything of this magnitude for a long time,' Dunnett said of the level of concern among EU businesses. Sefcovic said that the two sides had compared figures on the number of applications versus the licenses issued. The figures did not match, Sefcovic said, adding that the EU would supply Beijing with 'all the data and would cover all the companies which are now in an extremely difficult situation'. Sefcovic suggested that Beijing could simplify its system, which now screens all requests for 'dual use' applications, meaning the rare earths could go towards military production. 'Some of the car companies are already announcing that if this issue is not addressed, there might be huge production difficulties in a short period of time,' Sefcovic said. 'His information was a little bit different, and therefore we agreed that he would clarify this as soon as possible, and that we would also address the propositions I made yesterday, and this was that our strong preference here,' he added. The EU's proposals include 'not to cover ... civilian production by this very complex system', Sefcovic said. The bloc would also like to see a 'general application ... to cover it once a year for the whole production', eliminating the need for cumbersome repeat applications. Sefcovic said the EU wanted the changes to avoid 'huge paperwork delays and stress, which this presents for our industry and for our companies. 'We agree that we will come back to this issue relatively soon.' Also on Wednesday, the EU named 13 projects it would initiate beyond its borders to help improve its self-sufficiency in rare earths and critical minerals. 'The export bans reinforce our will to diversify and perhaps even strengthen the relevance of our focus on reducing dependencies,' Stephane Sejourne, the European Commission's head of industrial strategy, said in announcing the projects in Brussels. Two projects will cover rare earth minerals in Malawi and South Africa, while others focus on various raw materials in Britain, Canada, Greenland, Kazakhstan, Madagascar, Norway, Serbia, Ukraine, Zambia, Brazil and New Caledonia, a French overseas territory. The rare earth crisis adds another complication to already tense EU-China trade ties. Earlier this week, the bloc's member states voted to exclude Chinese companies from its lucrative medical devices procurement market after Beijing refused to open its tenders to the EU. In a bid to crack down on a deluge of small packages from Chinese e-tailers Temu and Shein, Brussels plans to add a surcharge of €2 (US$2.28) to small parcels imported. The EU also remains frustrated over Beijing's refusal to acknowledge state subsidies that it claims are leading to market-distorting industrial overcapacity. China, on the other hand, claims that Europe's moves to target its exporters are against the rules of global trade. - SOUTH CHINA MORNING POST

US steps up immigration crackdown with LA raids, NY courthouse arrests

The Sun

3 hours ago

The Sun

US steps up immigration crackdown with LA raids, NY courthouse arrests

LOS ANGELES (United States): Masked and armed federal agents carried out sweeping immigration raids in Los Angeles Friday, while others pounced on migrants at a New York courthouse in forceful displays of US President Donald Trump's crackdown on people without papers. From courthouses to hardware store parking lots in two of the most diverse cities in the world, federal agents wrestled migrants into handcuffs and unmarked vehicles. Agents used extreme tactics, conducting unprecedented raids on at least three areas of Los Angeles to detain dozens of people. At one sweep less than two miles from Los Angeles City Hall, agents threw flash-bang grenades to disperse angry crowds of people following alongside a convoy of Immigration and Customs Enforcement (ICE) vehicles as protesters hurled eggs and epithets at the agents, media reported. - 'Terror' - 'As a Mayor of a proud city of immigrants, who contribute to our city in so many ways, I am deeply angered by what has taken place,' LA Mayor Karen Bass said in a statement. 'These tactics sow terror in our communities and disrupt basic principles of safety in our city.' White House Deputy Chief of Staff Stephen Miller, who grew up in LA's Santa Monica, insisted on social media platform X that Bass had 'no say in this at all.' 'Federal law is supreme and federal law will be enforced.' Service Employees International Union leader David Huerta was briefly detained while documenting one of the raids in Los Angeles, according to media reports. 'Hard-working people, and members of our family and our community, are being treated like criminals,' Huerta said in a statement after his release. Homeland Security Investigations spokesperson Yasmeen Pitts O'Keefe told the Los Angeles Times that federal agents were executing search warrants related to the harboring of people illegally in the country. Hundreds of protesters gathered in downtown Los Angeles on Friday afternoon to demand the release of detainees, broadcaster ABC7 reported. The largely peaceful rally was later ordered to disperse by police, with some violent clashes between protesters and riot police being reported. - NY courthouse arrests - Across the country, plainclothes agents in New York pounced on two immigrants in the hallway of a courthouse Friday. AFP saw the officers yell for the men not to move before forcing them to lay face-down on the ground as they were handcuffed and arrested. It was not immediately clear why the two men were arrested. Trump was elected to a second term with broad support for his promise to crack down hard on the entry and presence of undocumented migrants. ICE agents have intensified such operations in and around American immigration courts in recent weeks. The Department of Homeland Security revoked regulations that limited agents' access to protected areas such as courts after Trump returned to office in January. One of the men arrested in New York was Joaquin Rosario, a 34-year-old Dominican who arrived in the United States a year ago, registered as he came in and who had his first immigration hearing Friday, his relative Julian Rosario said. 'He was at ease. He did not think anything was going to happen,' the relative said, adding that Rosario was so unworried he had not brought his lawyer with him. The other detainee appeared to be Asian. He arrived accompanied only by one of many immigration advocacy group volunteers who walk immigrants to and from the courtroom. The volunteers screamed out as the agents arrested the two men but it did nothing to halt the raid. - 'Sound the alarm' - Human rights groups are outraged by such operations, arguing that they sap trust in the courts and make immigrants wary of showing up for appointments as they try to gain US residency. 'They're illegal abductions,' said Karen Ortiz, a court employee who was demonstrating Friday against the sudden arrests of migrants. 'We need to sound the alarm and show the public how serious this is and one way we can do that is actually physically putting ourselves between a masked ICE agent and someone they're trying to detain and send away,' she told AFP. Trump has dramatically tested the limits of executive power to crack down on foreigners without papers since he returned to office, arguing that the United States is being invaded by criminals and other undesirables.

ICE raids spark outrage in LA, NYC amid migrant crackdown