The UK trade agreement was the easy part. China will be exponentially harder

Economic

Summary:

Despite a smooth UK trade deal, U.S.–China negotiations remain highly uncertain. Tariff tensions are intense, expectations are low, and the best hoped-for outcome is simply agreeing to future dialogue.

As Trump administration officials prepare to meet with Chinese officials in Geneva this weekend, it’s tempting to believe the momentum from the United Kingdom trade deal announcement on Thursday will carry over. Don’t hold your breath.

“I’m keeping my expectations in check. Tariffs are high. Tensions are high. It’s easier to impose tariffs than to unwind them,” said Wendy Cutler, a former US trade negotiator who is now vice president of the Asia Society Policy Institute.

President Donald Trump despises trade deficits — a situation when the US buys more from another country than it sells. In his view, it’s a sign that America is being “ripped off” and treated unfairly. (Economists are much less convinced of his argument.)

Since China is the world’s second-largest economy and a manufacturing supercenter, it’s perhaps unsurprising that, across all trading partners, the US ran the largest trade deficit with Beijing last year, at nearly $300 billion.

Trump has therefore levied the steepest tariffs on China, with rates starting at a whopping 145% for most products. China responded by slapping a minimum tariff of 125% on most US goods. Both countries’ economies are poised to take massive hits from the trade war, and bruises are already beginning to appear on both sides.

Investors and many businesses and consumers from both countries are eager to see the situation improve and are holding out hope that the weekend talks, which mark the first official dialogue between top US and Chinese government officials during Trump’s second term, will help. But it could quickly turn south, too.

Trump’s deal with the UK is hardly a great starting point for trade talks with China

Cutler anticipates that Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer, who are meeting with Chinese Vice Premier He Lifeng on Saturday, will bring up the UK trade deal to show that “their policy is working” and also that other countries “have concerns with China.”

Never mind that the scant details of the UK deal reveal it’s a relatively small win — if one at all. And it was also an agreement that was relatively easy to reach.

It helps that the UK had much less to negotiate down, with tariffs on its exports starting at 10% — which, even after the “deal,” remain at those levels. Some cars from there are getting a slight break on tariffs, and the Trump administration seemed to imply other carveouts are on the table. Another positive: The US ran a $12 billion trade surplus with the UK last year.

“It’s basically balanced trade,” Cutler told CNN. China, meanwhile, is “a different animal.”

The best possible outcome

Hardly anyone believes this first round of talks will bring US and Chinese tariffs back to where they were before Trump’s second term. That includes Bessent, who told Fox News earlier this week: “My impression is that this weekend’s discussions will focus on de-escalation rather than a significant trade agreement.”

Trump even outright said he wouldn’t consider lowering tariffs to get China to the negotiating table on Wednesday. But on Thursday, citing unnamed sources, the New York Post reported that the Trump administration was considering plans to cut tariffs on China to as low as 50% as soon as next week.

In that regard, it’s a positive sign that Trump said on Thursday he wasn’t considering levying even higher tariffs on Chinese goods. “You can’t get any higher. It’s at 145, so we know it’s coming down,” Trump said in the Oval Office after announcing the UK trade deal.

Bessent’s comments about de-escalation stood out to Susan Shirk, a research professor at the UC San Diego School of Global Policy and Strategy and director emeritus of its 21st Century China Center.

“What that suggests is that this decoupling, this extreme level of tariffs, is going to move in the direction of coming down either to zero or to some minimal level on both sides,” Shirk said.

Chinese President Xi Jinping and his administration, she said, are acting in a more disciplined manner compared to previous talks with the US. That suggests to her that “they’re not likely to mess it up.”

“They’re skeptical of Trump, and so they’re going to be very careful, which I think puts the right kind of pressure on President Trump,” she said.

Shirk said she’s hoping China demonstrates how “they are making a good faith effort to reduce the flood of exports going not just to the United States but all these other countries.”

In Cutler’s view, the best possible realistic outcome of the weekend talks would be if both sides leave with “a process for further engagement,” she said. Chief among those would be getting the ball rolling on a call between Trump and Xi.

Trump suggested he’d consider speaking with Xi on Thursday depending on how the weekend talks go.

The worst possible outcome

In contrast, the sky is the limit for how bad these talks could go and the actions both governments could take as a result. Both Cutler and Shirk agreed one of the worst-case scenarios would mirror the 2021 talks Biden administration officials held with Chinese officials in Alaska.

That quickly became disastrous for both sides as officials had a very public spat with one another using harsh rhetoric in front of a slew of journalists invited to cover what was initially intended to be brief opening remarks.

“The worst thing that could happen is kind of a big blowup, and the media is there to report it,” Shirk said.

“That’s exactly the type of meeting one wants to avoid,” said Cutler, who also served as acting deputy USTR in the Obama administration.

Alaska repeats aside, the worst possible outcome, she said, is for the US and China to “stake out their hard-line positions and not find common ground to move forward,” which would open the door for even higher tariffs to be imposed.

source : cnn

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Glendon

Economic

Forex

China–U.S. Trade War

US President Donald Trump floated an 80% tariff on China ahead of negotiations due to begin Saturday as he urged Beijing to do more to open their markets to US goods.

“80% Tariff on China seems right! Up to Scott B,” Trump said in a social-media post Friday morning, referring to Treasury Secretary Scott Bessent.

“CHINA SHOULD OPEN UP ITS MARKET TO USA — WOULD BE SO GOOD FOR THEM!!! CLOSED MARKETS DON’T WORK ANYMORE!!!,” he said in a separate post.

Bessent and US Trade Representative Jamieson Greer are set to begin talks with Chinese Vice Premier He Lifeng in Switzerland this weekend, the first public discussions between the world’s two largest economies on defusing a trade war that has seen Trump impose 145% levies on China and Beijing retaliate with 125% duties on many American goods.

Trump’s comments provided a stark dose of reality to investors who have been anticipating the start of negotiations between the two countries and eager for any sign that the US president will seek an off-ramp to ease a trade war that has roiled equity and bond markets and raised risks of a global downturn.

S&P 500 futures briefly turned negative and, while positive again, are well off session highs. European stocks trimmed gains and the Mexican peso reversed gains. Two-year US yields fell.

Trump levied high tariffs on dozens of nations in April only to quickly pause those import taxes to allow trading partners a 90-day window to negotiate deals with his administration. On Thursday, Trump touted the first of those agreements with the United Kingdom, though that deal appeared to fall well short of the “full and comprehensive” compact he had promised with many of the critical details being left to further negotiations.

Talks with China offer to be even more complicated. Trump earlier this week ruled out preemptively lowering taxes on China in order to help juice the negotiations.

While Trump has said in that he is willing to lower the tariffs on China at some point, the president and his advisers have said US consumers are willing to bear disruptions from the trade war in the form of higher prices and fewer choices to allow his bid to bring more manufacturing jobs to the country to succeed.

Source: Bloomberg Europe

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Adam

Commodity

Crude Oil Edges Higher as Trade Sentiment Lifts Market Confidence

Daily Light Crude Oil Futures

Light crude oil futures moved higher on Friday, breaking above key technical resistance levels at $59.68 and $60.09, with prices also surpassing a minor top at $60.26. The bullish breakout now puts the spotlight on $63.06 as the next price target, followed by the 50-day moving average at $64.10. With previous resistance now acting as near-term support, the $59.68–$60.09 zone is a critical floor for bullish momentum.

US-China Trade Optimism Supports Oil Prices Forecast

Oil markets are pricing in relief as trade tensions between the United States and China—two of the world’s largest oil consumers—appear to be easing. Crude benchmarks rose over 1% Friday, with Brent futures gaining as much as 3% on Thursday, driven by optimism around upcoming talks. U.S. Treasury Secretary Scott Bessent is scheduled to meet Chinese Vice Premier He Lifeng in Switzerland on May 10. Market analysts suggest a formal announcement of trade negotiations and a temporary tariff rollback could lift crude prices by $2 to $3 per barrel.

Chinese Import Resilience Provides Fundamental Backing

China’s April trade data added a layer of support, as exports outpaced expectations and the decline in imports narrowed. While crude imports dipped from March levels, they remained 7.5% higher year-on-year—underpinned by state refiners replenishing stocks during plant maintenance. The data signals ongoing demand resilience, which could stabilize near-term price expectations as global demand concerns persist.

OPEC+ Output Outlook Remains Mixed

The supply side, however, remains a potential cap on gains. OPEC+ continues to signal plans for increased production. Yet according to a Reuters survey, output actually declined in April due to losses in Libya, Venezuela, and Iraq, offsetting scheduled increases elsewhere. This mixed picture from OPEC+ could help limit downside pressure in the short term, particularly if demand-side confidence continues to build.

Bullish Outlook as Technicals and Sentiment Align

With prices now above key technical levels and geopolitical sentiment turning more supportive, the near-term outlook for crude oil is bullish. Momentum could accelerate if the upcoming US-China meeting results in a de-escalation of trade tensions. Barring a surprise from OPEC+ supply increases, traders may target a push toward $63 and beyond in the sessions ahead.

Source :fxempire

Risk Warnings and Disclaimers

Add to Favorites

Michelle

Economic

Forex

Federal Reserve Governor Adriana Kugler spoke on Friday, indicating that the U.S. economy and job market are displaying signs of resilience. However, Kugler also pointed out that there could be a potential decrease in consumer spending later in the year.

Despite recent figures suggesting a shrink in U.S. gross domestic product in the first quarter, Kugler stated that the underlying indicators of private sector consumption and investment have remained strong. This was stated in response to a question at an event hosted by the Central Bank of Iceland. Kugler interpreted these signals as evidence of the economy’s continuing resilience.

In response to a question about consumer sentiment towards President Donald Trump’s tariff policies, Kugler indicated that some measures of spending, such as retail sales, have shown signs of "front loading" in anticipation of expected price increases due to the tariffs. This trend could potentially reverse later. "You may see some fallback moving forward," Kugler said, hinting at a potential decrease in consumer spending in the future.

Source: Investing

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Cryptocurrency

Key points:

Bitcoin is at its highest levels since January, and traders are eyeing key levels to watch for what’s next.

After hitting $104,000, BTC/USD is retracing to establish support, but the fate of $100,000 is among the concerns for market participants.

Current price action represents an important battleground, as measured from the $75,000 lows this year.

” Headline driven” BTC price gains draw scrutiny

Just $6,000 from new all-time highs, per data from Cointelegraph Markets Pro and TradingView, BTC price action has stunned the market by jumping 10% in days.

The pace of the BTC price gains has come as a surprise for many, but longer-term perspectives show where the most difficult battleground lies.

“Since this current impulse was primarily headline driven again this puts markets into a crucial & critical trading day,” trader Skew said about the impetus for the move in an X post on May 8.

Skew refers to a common theme uniting BTC price volatility in recent weeks and months. Bitcoin and risk assets have become highly sensitive to headlines and even social media posts involving US President Donald Trump and his trade tariffs.

The latest event involves a trade deal between the US and UK, but how long optimism endures remains an open bet.

“I’m sure markets are hoping this has a kick on effect to get trade deals on the table for other major trade parties like EU & China,” Skew continued.

Another X post said what is needed now are “passive flows,” strong volume to support newly revisited levels and turn them into strong support.

Skew added:

“Passive flows will be important for accepting higher value especially after such a large market bid which led price to break $100K.”

BTC/USD 1-hour chart. Source: Cointelegraph/TradingView

Fibonacci levels spotlight crucial bull market battle

Current local highs for BTC/USD have breached the $104,000 mark, and zooming out, Fibonacci retracement analysis reveals that price is now in a key zone.

“$BTC is at the last technical level to clear before new ATHs,” commentator Patric H. announced in an X post.

“Bitcoin has already decisively cleared the 1.618 FIB and is now trading at the volume-area high (VAH) + a weak resistance trendline.”

BTC/USDT 1-day chart with Fibonacci levels. Source: Patric H./X

An accompanying chart offered important Fibonacci levels as measured from Bitcoin’s local lows around $75,000.

Another trading account, Kingpin Crypto, revealed a conspicuous breakout attempt for the 1.618 Fibonacci level on the monthly chart.

“Rejection and pullback from 1.618 lasted a bit longer till May. However, can’t deny how beautifully the fib level played out,” it said.

Bitcoin Eyes Sub-$100K Liquidity — Watch These BTC Price Levels Next_3

BTC/USDT 1-month chart with Fibonacci levels. Source: Kingpin Crypto/X

Liquidations waiting in the wings

A cautionary note involved order book liquidity at current levels.

The latest data from monitoring resource CoinGlass showed price eating away at bids immediately below $103,000, with the bulk of interest clustered below $100,000.

To the upside, however, little friction remained, with the bulk of liquidations having already occurred on the return to six figures.

Bitcoin Eyes Sub-$100K Liquidity — Watch These BTC Price Levels Next_4

Bitcoin liquidation heatmap (screenshot). Source: CoinGlass

“There’s much less short liquidity clustered above,” trader TheKingfisher confirmed on X.

“This notable imbalance makes the downside liquidation zone a potential key area to watch for volatility or price attraction.”

Bitcoin exchange order book liquidity data. Source: TheKingfisher/X

Source: Cointelegraph

Risk Warnings and Disclaimers

Add to Favorites

Adam

Stocks

U.S. stock index futures were subdued on Friday after a rally in the previous session, when a new trade agreement between the United States and Britain had fueled expectations of more such deals to ease the sting of the global trade war.

Investors are also awaiting meetings between U.S. and China representatives over the weekend in Switzerland.

Wall Street closed higher on Thursday after Britain and the U.S. struck the deal - the first of its kind since President Donald Trump paused his initial tariffs last month.

Under the new agreement, Britain will lower its tariffs on U.S. goods and provide greater import access, while the U.S.-imposed 10% baselines tariffs will remain in place.

However, the limited nature of the agreement brought up questions about its actual impact and potential to be used as a template for deals with other countries.

"Yesterday's price action suggests that investors are eager for good news and react positively — even if the news isn't that great... it's all in how it's delivered," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Meanwhile, Reuters reported India had offered to slash its tariff gap with the U.S. to less than 4% from nearly 13% now, in exchange for an exemption from Trump's tariffs, according to sources.

The Switzerland meetings between U.S. and China representatives will also grab focus, after Trump said he expected substantial negotiations and that China tariffs would come down from 145%.

"In the best-case scenario, talks go well, both countries commit to finding a reasonable deal, markets rally on Monday. Or… the talks break down, Trump says something he shouldn’t, and we wake up to another hectic week," said Ozkardeskaya.

A tit-for-tat tariff policy between the world's two biggest economies has raised concerns over the hit to global economic growth, leaving markets, companies and the U.S. Federal Reserve in wait-and-watch mode.

Chair Jerome Powell said on Wednesday the economy was in good shape, but acknowledged the heightened risks of inflation and unemployment and that it was unclear what the appropriate monetary policy response was at the moment.

At 05:36 a.m. ET, Dow E-minis were down 48 points, or 0.12%, S&P 500 E-minis were up 3.5 points, or 0.06%, and Nasdaq 100 E-minis were up 36.25 points, or 0.18%.

The S&P 500 and the Nasdaq are set for marginal declines this week.

In a light day for earnings, Trade Desk shares jumped 14% in premarket trading after the ad firm posted first-quarter revenue and profit above Wall Street estimates.

Pinterest climbed 13.4%, a day after it forecast current-quarter revenue above estimates.

Expedia slipped 9.4% after the online travel platform missed quarterly revenue estimates.

A host of Fed officials including presidents John Williams, Austan Goolsbee and Thomas Barkin are scheduled to speak through the day, in the first appearances after the latest Fed decision.

Source: finance.yahoo

Risk Warnings and Disclaimers

Add to Favorites

Adam

Commodity

China–U.S. Trade War

Oil extended gains as the market turned its attention to trade talks between the US and China this weekend, after President Donald Trump announced an agreement with the UK.

Brent climbed toward $64 a barrel, following a 2.8% gain in the previous session. The Trump administration is weighing a dramatic reduction of tariffs on China to de-escalate tensions and temper the economic pain both countries are already starting to feel.

Crude has tumbled from a mid-January peak on concerns tariffs will dent economic growth, while OPEC+ moved to revive idled production. Measured optimism on trade negotiations has helped prices recover some ground after starting the week near their lowest since 2021.

“There is renewed trade optimism across financial markets, including oil, following yesterday’s signing of the first UK–US trade agreement,” said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management. “There is strong support for oil prices in the $60–$64 range.”

Still, while the US president hailed the pact with the UK as historic, specifics of the deal indicated it fell short of the “full and comprehensive” agreement he had promised. And even though Trump said negotiations with China would result in tangible progress, Beijing reiterated on Thursday its call for the US to cancel tariffs ahead of talks.

The US, meanwhile, sanctioned a third so-called teapot refinery in China — along with port terminal operators, vessels and individuals — for allegedly facilitating the trade of Iranian crude. Hebei Xinhai Chemical Group was the main target of the action.

The UK also plans to sanction as many as 100 tankers that it says are part of the shadow fleet helping Russia move its oil. The measures, which target ships carrying more than $24 billion worth of cargo since the start of last year, will be announced later Friday.