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Trump's Late-Night Lament Over Xi Deepens Impasse in Trade Fight
Trump's Late-Night Lament Over Xi Deepens Impasse in Trade Fight

Yahoo

time2 days ago

  • Business
  • Yahoo

Trump's Late-Night Lament Over Xi Deepens Impasse in Trade Fight

(Bloomberg) -- President Donald Trump is positioning a personal discussion with his Chinese counterpart as the key to preventing the world's largest economies from spiraling deeper into their trade and technology fight. The Global Struggle to Build Safer Cars At London's New Design Museum, Visitors Get Hands-On Access ICE Moves to DNA-Test Families Targeted for Deportation with New Contract LA City Council Passes Budget That Trims Police, Fire Spending NYC Residents Want Safer Streets, Cheaper Housing, Survey Says But Chinese leader Xi Jinping is making clear that a phone call doesn't come without a price — a resolute stand so far that's apparently keeping Trump up late into the night. 'I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!' Trump posted on Truth Social at around 2:17 a.m. Washington time. His complaint came after a flurry of US officials claimed this week the two men were set to speak. Exactly what the Chinese are asking the White House to relinquish in order to secure the one-on-one remains unclear. But the US president's unanswered pleas are looking more like a standoff without an off ramp. Beijing, meanwhile, is making overtures in the direction of Europe, which is engaged in its own tariff dispute with Trump. 'If China doesn't want a call, it could be that they don't intend to comply or are intentionally holding their cards for the time being,' said Kelly Ann Shaw, a partner at Akin Gump and former senior adviser to Trump during his first term. 'If there isn't a call, I would expect further escalation in the bilateral relationship before things de-escalate again.' At the heart of the stalemate is a mismatch in negotiating styles that, if it continues, threatens to derail the bilateral relationship. While Trump wants to hash things out with his counterpart, Chinese officials are reluctant to commit before working out deliverables at lower levels. Oval Office showdowns with the leaders of South Africa and Ukraine in recent weeks have likely offered little reassurance to Beijing to accept Trump's terms. A 'Disconnect' 'There's a fundamental disconnect here,' former acting White House Chief of Staff Mick Mulvaney told Bloomberg Television on Tuesday. 'Trump wants to talk at the very highest levels. That's not always how the Chinese want to do business.' While it isn't impossible for the US and China to strike a deal, expectations for what it would entail look out of sync. Policymakers in Beijing want to have broader access to high-end US chips, essentially for AI and military advancement, as well as the opportunity for more Chinese investment in the US. Beijing could be open to buying more US agricultural products, too. Rolling back sweeping controls on cutting-edge technology expanded under Joe Biden would be politically toxic in Washington, where there's rare consensus among Democrats and Republicans that China poses a national security threat. Officials in Washington also believe Beijing has been dumping goods on the US for decades, threatening American jobs and industry, and are seeking major concessions. That both sides are talking past each other has become evident in the confusion over China's position on rare earths — metals that are core to America's national-security supply chains and automakers in particular. Trump and his team have accused Beijing of breaking the trade agreement announced in mid-May, where both countries significantly lowered tariffs and China agreed to remove other retaliatory measures it imposed in response to earlier duty hikes. In Washington's view, that meant China would immediately grant licenses to export rare earths to American companies that had been cut off. Stalling for Time US Trade Representative Jamieson Greer said China has slow-walked the process. Companies that are reliant on the inputs are feeling the supply squeeze, with some temporarily shuttering production. From Beijing's perspective, it's following procedure on a license system that exports to all nations must follow. As tensions over such shipments grow, the Trump administration has continued to impose restrictions on chip technology and exports of jet engine parts to China. Beijing publicly criticized the moves and, according to the Trump team, continued choking off critical minerals supplies to American companies. While giving Trump the cold shoulder, China is tilting its attention toward Europe, where it sees an opening for deeper trade ties after Trump hit the European Union with tariffs and threatened steeper ones. In anticipation of the EU-China summit in late July in Beijing, Europe's trade chief Maros Sefcovic on Tuesday met Chinese Commerce Minister Wang Wentao in Paris. Ahead of next month's summit, China is considering placing an order for hundreds of Airbus SE aircraft as soon as next month to celebrate the economies' long-term ties, Bloomberg News reported. That represents another blow to Boeing Co., which hasn't won a major order from China since at least 2017 due to the trade tensions and other issues. It all stands in contrast to Trump's first trade offensive against China, when it took just 10 weeks for China to announce Xi would fly to Mar-a-Lago for talks with the US. The result was a so-called phase one trade deal aimed at boosting Chinese purchases of American products — an agreement that went dormant during the Biden administration. This time around, ties have derailed much more quickly — despite Chinese efforts to steady things. January Call Just before Trump's most recent inauguration, Xi called Trump and told the incoming leader he was hoping for a good start to US-China ties, with both sides agreeing to stay in touch. Days later, Trump began targeting fentanyl cooperation, attacking a relatively bright spot in bilateral ties where Beijing has said the US owes it a 'big thank you' for efforts to curtail smuggling. China has repeatedly pointed to demand from Americans as the root cause of fentanyl abuse. Trump followed up with a 20% tariff, setting off tit-for-tat rounds of levies that essentially imposed a trade embargo on the two nations. A US federal court ruled Trump's duties were illegal, sapping the president of leverage, but the order was put on hold as a higher court considers an appeal. Also playing into Xi's reluctance is the fact China is in a stronger position now than in the last trade war to weather Trump's unpredictability. The world's No. 2 economy has been diversifying beyond the US market, its people are relatively united in the face of Trump's threats, and the US is alienating friends and foes alike with its overhaul of economic and defense policy. 'One problem is that Trump is trying to use deal-making to normalize trade aggression,' said Josef Gregory Mahoney, a professor of international relations at Shanghai's East China Normal University. 'Another issue is that he remains an opportunist, and even when deals are struck you can't count on him to keep them, or the next administration.' YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Is Elon Musk's Political Capital Spent? Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To ©2025 Bloomberg L.P.

Tariff-Resistant Economy Soothes Traders Ahead of Jobs Day
Tariff-Resistant Economy Soothes Traders Ahead of Jobs Day

Yahoo

time2 days ago

  • Business
  • Yahoo

Tariff-Resistant Economy Soothes Traders Ahead of Jobs Day

(Bloomberg) -- Options traders are betting the S&P 500 Index will post its smallest swing in months following Friday's US employment report, highlighting how a spate of better-than-expected data has calmed investor worries over the economic impact of President Donald Trump's tariffs. The Global Struggle to Build Safer Cars At London's New Design Museum, Visitors Get Hands-On Access LA City Council Passes Budget That Trims Police, Fire Spending ICE Moves to DNA-Test Families Targeted for Deportation with New Contract NYC Residents Want Safer Streets, Cheaper Housing, Survey Says The benchmark is projected to move 0.9% in either direction on Friday, according to data compiled by Piper Sandler & Co. That figure, based on the prices of S&P 500 options straddles as of Tuesday's close, is the smallest implied swing ahead of a jobs print since February and below an average realized move of 1.3% over the past year. Concern over the global trade war's impact on US growth flared in early April, after Trump unveiled a list of tariffs aimed at the country's trading partners around the globe. Stocks tumbled, with the S&P 500 falling to the edge of a bear market. But Trump has mitigated or stalled many of those levies in the weeks since, while data on measures such as inflation and job openings suggest the economy is taking the trade chaos in stride. The S&P 500 is just 2.8% off its all-time high reached earlier this year, following a weekslong surge. 'Tariffs initially spooked markets, but stocks have recovered because there aren't meaningful cracks in the economy yet,' said Vishal Vivek, equity trading strategist at Citigroup Inc. 'The risk is if unemployment unexpectedly spikes. Then stocks would need to reprice for slower growth.' Economists polled by Bloomberg expect the US economy to have created roughly 130,000 in May, down from 177,000 a month prior. The jobless rate is expected to hold steady at 4.2%. ADP Research data on Wednesday showed hiring decelerated to the slowest pace in two years last month, raising concern that Friday's non-farm payrolls figures could also show labor conditions weakening. A separate report showed activity at US service providers slipped into contraction territory last month for the first time in nearly a year. The S&P 500 Index traded 0.1% higher at 10:04 a.m. in New York. Sanguine Outlook Trader positioning reflects a sanguine outlook going into the report. After the S&P 500 soared 6.2% last month — its best May since 1990 — hedge funds and other large speculators have turned net short on futures tied to the Cboe Volatility Index for the first time in five weeks, data from the Commodity Futures Trading Commission show. Solid economic numbers helped boost their confidence. The Citigroup US Economic Surprise Index, a rolling measure of whether economic indicators are clocking in above or below expectations, turned positive in late May for the first time since mid-February, when the S&P 500 traded at records. Meanwhile, the Atlanta Fed's GDPNow model sees real gross domestic product growing at a 4.6% annualized rate in the second quarter, up from a contraction of 0.2% in the first three months of the year. Of course, a negative jobs day surprise could sour the mood. JPMorgan Chase & Co.'s trading desk, led by Andrew Tyler, said in a Monday note the S&P 500 may drop as much as 3% if the economy created fewer than 100,000 jobs in May. The chance of such an outcome, however, is only around 5%, according to his estimates. In the most likely scenario, jobs growth last month will come in between 115,000 to 135,000, with the index gaining 0.25% to 1%, Tyler says. The jobs data will also help investors gauge whether the Federal Reserve will keep rates on hold for the foreseeable future, as it attempts to balance trade war uncertainties with threats of slowing growth and accelerating inflation that could result from the tariffs. The central bank enters a blackout period this weekend ahead of its June 18 rate decision. 'Even if jobs growth somewhat slows, traders will give this report a pass because employment data lags,' said Larry Benedict, chief executive of The Opportunistic Trader, a financial market-research firm. 'It will take a few months before the tariff impacts will really begin to appear in those figures.' (Updates with ADP, services data, S&P 500 trading in sixth paragraph.) YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Is Elon Musk's Political Capital Spent? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Wedbush's Dan Ives Joins ETF Wave Turning Analysts Into Brands
Wedbush's Dan Ives Joins ETF Wave Turning Analysts Into Brands

Yahoo

time2 days ago

  • Business
  • Yahoo

Wedbush's Dan Ives Joins ETF Wave Turning Analysts Into Brands

(Bloomberg) -- Wall Street tech analyst Dan Ives is lending his personal brand to power a new ETF riding the artificial-intelligence boom, joining a growing pack of finance names looking to monetize their industry renown with retail-friendly investment funds. Billionaire Steve Cohen Wants NY to Expand Taxpayer-Backed Ferry The Global Struggle to Build Safer Cars At London's New Design Museum, Visitors Get Hands-On Access LA City Council Passes Budget That Trims Police, Fire Spending ICE Moves to DNA-Test Families Targeted for Deportation with New Contract Wedbush Fund Advisers is launching a product tracking the investment picks touted by Ives, whose high-conviction tech calls have earned him a sizable following among the likes of retail investors. The Dan IVES Wedbush AI Revolution ETF is launching Wednesday with the ticker IVES, and is focused on Ives' 'proprietary research.' It comprises 30 names in AI sectors, including semiconductors, cybersecurities and robotics, among others. It's the latest in a growing trend of money managers, strategists and analysts with high name recognition launching their own ETFs in recent months, with the tally including economist Nouriel Roubini and Fundstrat's Tom Lee — the latter's fund has been able to attract more than $1 billion in inflows since its late-2024 inception. Even President Donald Trump's media company has announced plans for its own suite of ETFs and other products, with some analysts citing the famous 'Trump' brand as a potential catalyst for inflows, once the funds debut. Yet the ETF market has become known for its oversaturation of products, with some 4,200 offerings in the US alone, spanning all manner of asset classes and themes. There are more than 25 ETFs that focus on the AI theme or are AI-powered, according to data compiled by Bloomberg. For many, it's been difficult to compete in such an overcrowded field, leading to a slew of liquidations in recent years. Underperformance can also be a huge detriment to a fund's success. Ives, who has been with Wedbush for about seven years, says his years of coverage and extensive research help differentiate his ETF from other AI-centric offerings. He called AI the biggest tech theme of the past 50 years. 'Investors around the world have focused on our research in tech for decades,' he said in an interview. 'It's those same clients and philosophy that we believe is going to lead us to success here. Because when it comes to the AI revolution, we've been early, we've identified the winners.' Ives, who is a managing director and the global head of technology research at Wedbush Securities, has more than 180,000 followers on X and makes frequent media appearances. Wedbush Fund Advisers has plans for additional ETFs, according to Cullen Rogers, its chief investment officer. But for now, IVES is something that could be attractive to both retail and institutional clients, according to Rogers. 'When we looked around at our internal assets, there's no greater asset than Dan Ives, his market views, the way that he sees these seismic shifts going on across the world, especially in AI,' he said. --With assistance from Jeran Wittenstein. YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Is Elon Musk's Political Capital Spent? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? ©2025 Bloomberg L.P.

US Borrowers Face Higher Interest If Trump's ‘Revenge Tax' Becomes Law
US Borrowers Face Higher Interest If Trump's ‘Revenge Tax' Becomes Law

Yahoo

time2 days ago

  • Business
  • Yahoo

US Borrowers Face Higher Interest If Trump's ‘Revenge Tax' Becomes Law

(Bloomberg) -- A measure in President Donald Trump's tax and spending bill that's meant to penalize foreign investors may also raise interest costs for some US borrowers. Billionaire Steve Cohen Wants NY to Expand Taxpayer-Backed Ferry The Global Struggle to Build Safer Cars At London's New Design Museum, Visitors Get Hands-On Access LA City Council Passes Budget That Trims Police, Fire Spending ICE Moves to DNA-Test Families Targeted for Deportation with New Contract The so-called Section 899 provision takes aim at nations such as Canada, the UK and France that have digital services taxes or other corporate tax rules the US deems unfair. Investors and companies from those countries may see gradually higher tax rates on income they earn from US assets — which some analysts have called a 'revenge tax.' But Section 899 would affect loan interest payments in a way that would hurt some US companies, according to legal experts. Many lending agreements require borrowers to cover such tax hikes if they're enacted after the deal is signed. These requirements are known as withholding tax gross-up obligations. Borrowers remit the withholding tax to the US government, but they must 'gross up' their payment to ensure the lender still receives the full amount of interest owed. For example, a 5% withholding tax would require a borrower owing $1,000 in interest to remit $50 to the US government, and then gross up its payment so the lender still receives $1,000. The borrower's combined tax and interest payment would actually be about $1,053 — because the gross-up payment itself is also subject to withholding tax. 'It's a significant problem,' said Matthew Brown, a partner in the Washington office of law firm A&O Shearman, as the measure would likely touch loans made by foreign banks that lend to US borrowers from outside of a US branch. That scenario is very common for syndicated loans, he said. The tax bill still faces plenty of hurdles, including opposition from a number of Republican Senators over Medicaid cuts and the size of the deficit. The legislation was attacked by Elon Musk, who called it a 'massive, outrageous, pork-filled Congressional spending bill' and 'a disgusting abomination.' Some borrowers may be able to sidestep the increased interest costs of the proposed Section 899 by booting non-US lenders from their credit facilities. But whether they do so depends on 'how strong a position the borrower is in and their ability to have lots of options for lending,' Brown said. Some lenders may also choose to absorb the tax costs, since those demanding a gross-up from borrowers might be denied future deals. 'Memories are long,' said Carolyn Alford, partner with King & Spalding LLP in New York. If the measure takes effect, lenders — not borrowers — from affected countries would be expected to bear the increased cost of credit deals signed after that. That could make them less willing to lend to US entities. A French or British bank, for example, 'will have to assess whether or not it wants to continue to make loans if it's running the risk of incurring this uncompensated withholding tax,' said Michael Mollerus, partner with Davis Polk & Wardwell in New York. House Ways and Means Committee Chair Jason Smith said last week he hopes Section 899 will be a deterrent that is never deployed, and Senate Majority Leader John Thune told reporters his chamber is examining the provision. Nonetheless, the proposal has alarmed Wall Street, where analysts fear it would drive away foreign investors. As written, the tax rate increase is designed to rise over time — it starts at five percentage points and increases another five points each year until it's 20 points above the statutory rate. Brown said he expects the provision is meant to 'bring countries to the table' to discuss their corporate tax rules. 'I do not believe the intention is to drive up the cost of borrowing in the United States.' YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Is Elon Musk's Political Capital Spent? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? ©2025 Bloomberg L.P. Sign in to access your portfolio

US Borrowers Face Higher Interest If Trump's ‘Revenge Tax' Becomes Law
US Borrowers Face Higher Interest If Trump's ‘Revenge Tax' Becomes Law

Yahoo

time2 days ago

  • Business
  • Yahoo

US Borrowers Face Higher Interest If Trump's ‘Revenge Tax' Becomes Law

(Bloomberg) -- A measure in President Donald Trump's tax and spending bill that's meant to penalize foreign investors may also raise interest costs for some US borrowers. Billionaire Steve Cohen Wants NY to Expand Taxpayer-Backed Ferry The Global Struggle to Build Safer Cars At London's New Design Museum, Visitors Get Hands-On Access LA City Council Passes Budget That Trims Police, Fire Spending ICE Moves to DNA-Test Families Targeted for Deportation with New Contract The so-called Section 899 provision takes aim at nations such as Canada, the UK and France that have digital services taxes or other corporate tax rules the US deems unfair. Investors and companies from those countries may see gradually higher tax rates on income they earn from US assets — which some analysts have called a 'revenge tax.' But Section 899 would affect loan interest payments in a way that would hurt some US companies, according to legal experts. Many lending agreements require borrowers to cover such tax hikes if they're enacted after the deal is signed. These requirements are known as withholding tax gross-up obligations. Borrowers remit the withholding tax to the US government, but they must 'gross up' their payment to ensure the lender still receives the full amount of interest owed. For example, a 5% withholding tax would require a borrower owing $1,000 in interest to remit $50 to the US government, and then gross up its payment so the lender still receives $1,000. The borrower's combined tax and interest payment would actually be about $1,053 — because the gross-up payment itself is also subject to withholding tax. 'It's a significant problem,' said Matthew Brown, a partner in the Washington office of law firm A&O Shearman, as the measure would likely touch loans made by foreign banks that lend to US borrowers from outside of a US branch. That scenario is very common for syndicated loans, he said. The tax bill still faces plenty of hurdles, including opposition from a number of Republican Senators over Medicaid cuts and the size of the deficit. The legislation was attacked by Elon Musk, who called it a 'massive, outrageous, pork-filled Congressional spending bill' and 'a disgusting abomination.' Some borrowers may be able to sidestep the increased interest costs of the proposed Section 899 by booting non-US lenders from their credit facilities. But whether they do so depends on 'how strong a position the borrower is in and their ability to have lots of options for lending,' Brown said. Some lenders may also choose to absorb the tax costs, since those demanding a gross-up from borrowers might be denied future deals. 'Memories are long,' said Carolyn Alford, partner with King & Spalding LLP in New York. If the measure takes effect, lenders — not borrowers — from affected countries would be expected to bear the increased cost of credit deals signed after that. That could make them less willing to lend to US entities. A French or British bank, for example, 'will have to assess whether or not it wants to continue to make loans if it's running the risk of incurring this uncompensated withholding tax,' said Michael Mollerus, partner with Davis Polk & Wardwell in New York. House Ways and Means Committee Chair Jason Smith said last week he hopes Section 899 will be a deterrent that is never deployed, and Senate Majority Leader John Thune told reporters his chamber is examining the provision. Nonetheless, the proposal has alarmed Wall Street, where analysts fear it would drive away foreign investors. As written, the tax rate increase is designed to rise over time — it starts at five percentage points and increases another five points each year until it's 20 points above the statutory rate. Brown said he expects the provision is meant to 'bring countries to the table' to discuss their corporate tax rules. 'I do not believe the intention is to drive up the cost of borrowing in the United States.' YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Is Elon Musk's Political Capital Spent? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? ©2025 Bloomberg L.P.

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