US-China Reach Trade Framework as Court Upholds Trump Tariffs—Uncertainty Persists Ahead of July Deadline

Economic

China–U.S. Trade War

Summary:

A new framework to ease US-China trade tensions was agreed in London, focusing on rare earths and tech, while a US appeals court allowed Trump’s contested tariffs to remain in place...

Framework Agreement Signals Progress, But Final Approval Still Pending

After two days of tense negotiations in London, US and Chinese officials announced on Tuesday that they had reached a framework and implementation plan aimed at de-escalating trade tensions. The breakthrough, announced by US Commerce Secretary Howard Lutnick, centers on resolving disputes over rare earth exports and US restrictions on high-tech components.

“We have reached a framework to implement the Geneva consensus,” Lutnick said, referring to the temporary truce brokered last month. The plan must now be reviewed and approved by US President Donald Trump and Chinese President Xi Jinping, who last week held a phone call that helped revive diplomatic momentum.

This development offers cautious optimism after weeks of mutual accusations over breaches of the Geneva truce. Still, the lack of detailed enforcement mechanisms and continued uncertainty over US tariff policy make it unclear whether this new deal will lead to durable de-escalation or simply postpone further confrontation.

Tariff Uncertainty Deepens as Court Ruling Favors White House

Underscoring the volatile nature of US trade policy, a federal appeals court ruled Tuesday that Trump's controversial tariffs—initially blocked by the US Court of International Trade—can remain in effect pending further legal review. The initial ruling had challenged the legality of how the tariffs were implemented, casting doubt on the broader framework of Trump’s trade strategy.

This legal reprieve allows the administration to continue enforcing duties, including new tariff hikes on steel and aluminum that took effect on June 4, raising rates from 25% to 50%. The move comes as part of Trump’s aggressive push for “reciprocal” tariffs against countries that he claims benefit unfairly from access to the US market.

July Deadline Looms as Global Talks Accelerate

With the 90-day tariff pause set to expire in early July, pressure is mounting on US trading partners to accelerate negotiations. The White House has issued reminders to allies and adversaries alike, warning that failure to reach deals could trigger a fresh round of sweeping tariffs.

So far, only the United Kingdom has finalized a bilateral agreement. Talks with India remain ongoing, with both sides agreeing this week to extend negotiations into early July. The clock is ticking, and the risk of another global tariff surge looms large.

Markets Respond Cautiously to Mixed Signals

Despite progress in the US-China dialogue, markets remain cautious. The dollar held steady following the announcement, reflecting investor hesitation amid conflicting signals—a diplomatic breakthrough on one hand, and aggressive trade enforcement on the other. While the framework deal could restore some predictability to US-China relations, the overall environment remains legally and economically unstable.

The dual headlines—a new diplomatic framework and a court ruling that upholds contested tariffs—underscore the layered complexity of the current US trade strategy. Even as leaders seek to restore order to key economic relationships, the machinery of tariff escalation remains fully operational. Unless the new US-China agreement leads to enforceable commitments and legal clarity, the risk of a renewed trade war remains unresolved. The next four weeks will be critical in determining whether this truce evolves into lasting stability—or a new round of global economic disruption.

Source: Reuters

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FastBull Featured

[Quick Facts]

1. Affected by tariffs and the U.S. president's annexation remarks, the number of travelers between Canada and the U.S. has fallen for five consecutive months

2. Sources indicate that the U.S. and Mexico are close to reaching an agreement on steel tariffs

3. Oil demand will grow strongly over the next 25 years.

4. India and the U.S. are expected to reach a temporary trade agreement

5. Japan's largest opposition party, the Constitutional Democratic Party, advocates lowering the central bank's inflation target.

6. Vučić: We can wait until September to discuss interest rate actions

[News Details]

Affected by tariffs and the U.S. president's annexation remarks, the number of travelers between Canada and the U.S. has fallen for five consecutive months

Preliminary data from Statistics Canada on the 10th (local time) indicates that in May, Canadian outbound travel to the U.S. continued to decline. Cross-border travel volumes between Canada and the U.S. have decreased for the fifth consecutive month. Data shows that in May 2025, the number of Canadian residents returning from the U.S. by air decreased by 24.2% year-over-year, while those returning by automobile declined by 38.1%. Conversely, U.S. residents traveling to Canada by car decreased by 8.4%, and air travel from the U.S. to Canada fell by 0.3% year-over-year. The sustained downturn in cross-border tourism is attributed to factors such as U.S. tariffs and President Trump's annexation remarks. The decline in passenger traffic has also led some airlines to reduce flights to the U.S.

Sources indicate that the U.S. and Mexico are close to reaching an agreement on steel tariffs

According to informed sources, the U.S. and Mexico are nearing an agreement to eliminate the 50% tariff on steel imports below a certain quota. President Trump was not directly involved in the negotiations, which were led by U.S. Secretary of Commerce Lutnick. Under the proposed terms, as long as U.S. importers keep total shipments below a threshold based on historical trade volumes, duty-free importation of Mexican steel will be permitted. The new quota will exceed the limit established during Trump's first term under a similar arrangement. Data from the U.S. Department of Commerce indicate that last year, U.S. steel imports from Mexico totaled approximately 3.2 million tons, representing about 12% of total U.S. steel imports. During Trump's initial presidency, the U.S. and Mexico reached an agreement in 2019 to prevent steel imports from exceeding the average levels observed during 2015-2017.

Oil demand will grow strongly over the next 25 years.

OPEC Secretary General Al Ghais stated at a conference in Canada on Tuesday that, with global population growth, oil demand is expected to remain robust over the next 25 years. The organization projects that from now until 2050, global energy consumption will increase by 24%, with oil demand surpassing 120 million barrels per day. He emphasized that OPEC believes "crude oil demand will not peak in the foreseeable future." Al Ghais highlighted that while OPEC places great importance on climate change mitigation, the focus must remain on emission reduction rather than selecting specific energy sources.

India and the U.S. are expected to reach a temporary trade agreement

Indian government sources indicate that negotiations between Indian and U.S. trade representatives have made progress, focusing on market access for industrial and certain agricultural products, tariff reductions, and non-tariff barriers. Both parties are expected to reach a provisional trade agreement by the end of this month. Sources mention discussions on enhancing bilateral digital trade through improved customs procedures and trade facilitation measures, with ongoing negotiations aimed at early conclusion of initial phases of the trade deal.

Officials add that the next phase of negotiations may address more complex issues, with the goal of signing the first segment of the bilateral trade agreement by September or October. One source states that India has rejected the U.S. request to open markets for wheat, dairy, and corn imports, while offering lower tariffs on high-value U.S. products such as almonds, pistachios, and walnuts. India also demands the U.S. eliminate the 10% baseline tariff, a stance opposed by the U.S., which notes that even the UK must adhere to such provisions in recent bilateral trade agreements.

Japan's largest opposition party, the Constitutional Democratic Party, advocates lowering the central bank's inflation target

The Constitutional Democratic Party of Japan (CDPJ), the country's largest opposition party, released its campaign platform for the July Upper House election on Tuesday, advocating for a reduction in the Bank of Japan's inflation target and granting the central bank greater flexibility in interest rate hikes. In 2013, the Bank of Japan signed a joint statement with the government committing to achieving a 2% inflation target "at the earliest possible time," following then-Prime Minister Shinzo Abe's call for more aggressive measures to combat deflation. The ruling Liberal Democratic Party (LDP), led by Shinzo Abe, has consistently ruled out revising this joint statement, even as inflation has surpassed the 2% target, fueling public discontent and prompting the Bank of Japan to raise interest rates to 0.5%.

The CDPJ's campaign platform proposes amending this joint statement to provide the Bank of Japan with greater flexibility to raise interest rates and to reverse the yen's depreciation. CDPJ leader Noda Yoshihiko stated at a press conference, "We aim to set the inflation target around 0%, with some room for maneuver, allowing the Bank of Japan more flexibility in guiding monetary policy." The minority ruling coalition, led by Prime Minister Shigeru Ishiba, continues to experience low approval ratings, partly due to public dissatisfaction with rising living costs. Some analysts anticipate that the LDP, under Ishiba's leadership, may suffer significant losses in the July election, increasing the likelihood of forming alliances with opposition parties such as the Japanese Communist Party.

Vučić: We can wait until September to discuss interest rate actions

European Central Bank Governing Council member and Croatian National Bank Governor Vučić stated on Monday that the central bank should delay further discussions on interest rate policy until at least September. We believe we are currently in a strong position, and it is prudent to await additional economic data. In my view, obtaining another forecast before determining the next monetary policy move is advisable, with the hope that trade relations will become clearer by then.

[Today's Focus]

UTC+8 17:30 ECB Chief Economist Lane Speaks

UTC+8 20:30 U.S. May CPI

Risk Warnings and Disclaimers

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Gerik

Forex

China–U.S. Trade War

Greenback Steadies Amid Fragile Optimism

The US dollar held largely steady in Wednesday's early Asian trading after the United States and China concluded two days of high-stakes negotiations in London, producing a framework agreement aimed at reviving the stalled trade truce first outlined in Geneva. The agreement includes China relaxing its export restrictions on rare earths and magnets, while the US will ease certain newly imposed export controls—moves intended to signal goodwill and stabilize bilateral economic relations.

Despite the political breakthrough, market response remained muted. The dollar fell modestly by 0.14% against the yen to 144.770 and slipped 0.13% versus the Swiss franc. The euro stayed flat at $1.1427, and China’s offshore yuan barely moved at 7.1881 per dollar. The dollar index, which tracks the greenback against six major currencies, hovered at 99.068—down more than 8% year-to-date, underscoring investor caution.

Skepticism Remains Over Long-Term Resolution

While the framework deal marks a step toward de-escalation, it stops short of delivering a comprehensive resolution to the US-China trade standoff. Analysts like Ray Attrill of National Australia Bank stressed that trust between Presidents Trump and Xi remains significantly eroded since the earlier Geneva accord, making the implementation and durability of the new framework far from guaranteed.

The absence of concrete enforcement mechanisms or a clear timetable for dismantling tariffs has tempered investor enthusiasm. Markets are cautiously watching whether the agreement leads to a lasting reduction in trade friction or merely delays a deeper rupture. This uncertainty continues to limit the dollar’s upside potential, especially in a climate where US policy unpredictability has weighed heavily on global sentiment.

Macro Focus Shifts to Inflation and Fed Policy

Attention is now turning to the US consumer inflation report due later in the day. With tariffs remaining in place on a broad range of goods, inflation data could reveal how much these policies are feeding into consumer prices. A stronger-than-expected inflation print would complicate the Federal Reserve’s current stance of holding rates steady, and possibly delay anticipated rate cuts.

The Fed is expected to leave interest rates unchanged in its upcoming meeting, but futures markets are pricing in nearly two 25-basis-point cuts by year-end. Any inflationary surprise tied to ongoing trade disruptions could force a reevaluation of that path.

Meanwhile, the British pound inched up to $1.35, recovering some ground ahead of UK Chancellor Rachel Reeves’ upcoming fiscal policy announcements. However, labor market weakness flagged in recent data has exerted pressure on sterling, limiting gains despite investor interest in potential changes to public spending.

The US-China framework agreement has provided markets with a brief moment of calm, helping the dollar stabilize after months of depreciation. Yet structural skepticism about the agreement’s enforceability and broader concerns about US inflation and Federal Reserve policy continue to weigh on sentiment. For now, investors remain cautiously hopeful—but not yet convinced—of a sustainable turning point in US-China trade relations or dollar strength.

Source: Reuters

Risk Warnings and Disclaimers

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Christopher Hayes

Several executives at Rockwell Automation have recently sold shares of the company's common stock, primarily to cover taxes due on vested restricted stock units, as per SEC Form 4 filings.

Matthew W. Fordenwalt, SVP Lifecycle Services, sold 289 shares at a weighted average price of $326.3319, totaling $94,309. Post-transaction, Fordenwalt directly owns 3,196 shares and indirectly owns 63 shares through a Savings Plan.

Tessa M. Myers, SVP of Intelligent Devices, sold 363 shares at a weighted average price of $326.3186 per share, totaling $118,453. Myers now directly owns 4,063 shares and indirectly owns 8 shares through a savings plan.

Isaac Woods, Vice President and Treasurer, sold 297 shares at a weighted average price of $326.3058 per share, totaling $96,912. Woods directly owns 1,691 shares and indirectly owns 456 shares through a Savings Plan post-sale.

Christopher Nardecchia, SVP and Chief Information Officer, sold 551 shares at a weighted average price of $326.3082, totaling $179,795. Nardecchia directly owns 12,711 shares and indirectly owns 5 shares through a Savings Plan following the transaction.

Robert L. Buttermore, SVP, Chief Supply Chain Officer, sold 494 shares at a weighted average price of $326.3106 per share, totaling $161,197. Buttermore directly owns 1,964 shares and indirectly owns 275 shares through a Savings Plan after the sale.

Bulho Matheus De A G Viera, SVP Software and Control, sold 250 shares at a weighted average price of $326.3324 per share, totaling $81,583. Viera directly owns 1,509 shares and indirectly owns 5 shares through a Savings Plan post-transaction.

Source: TradingView

Risk Warnings and Disclaimers

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Katherine Pierce

Key points:

● Deal could give Mexico a fixed quota with no tariff or lower tariff, sources say

● Volumes exceeding quota could face 50% tariff

● Mexico presses for exemption from Trump's steel tariff

The United States and Mexico are negotiating a deal to reduce or eliminate President Donald Trump's 50% steel tariffs on imports up to a certain volume, industry and trade sources said on Tuesday.

An industry source familiar with the talks said that a likely outcome would include a quota arrangement, under which a specified volume from Mexico could enter duty free or at a reduced rate and any imports above that level would be charged the full 50% tariff.

It was unclear whether the deal would eliminate tariffs altogether for in-quota steel import volumes from Mexico or reduce them to a lower level, the source said. The specific volume level of the quota also was not yet determined.

Bloomberg News first reported the negotiations over tariff reductions for Mexican steel, quoting people familiar with the matter as saying that the two sides were close to a deal. The report said that terms of the agreement had not been finalized but would allow U.S. companies to import Mexican steel tariff-free as long as total shipments are kept below a level based on historical trade volumes.

A White House spokesperson declined comment, while a spokesperson for the Commerce Department which administers Trump's "Section 232" national security tariffs on steel and aluminum did not respond to a request for comment.

Mexico was the third largest source of U.S. steel imports in 2024 at 3.52 million net tons, down 16% from 4.18 million in 2024, according to U.S. Census Bureau data compiled by the American Iron and Steel Institute.

Canada was the largest foreign steel supplier at 6.56 million net tons in 2024, followed by Brazil at 4.5 million.

When Trump first imposed 25% steel tariffs in 2018, Mexico and Canada were granted exemptions with special procedures aimed at curbing any import surges beyond historical volumes. But these measures stopped short of a formal quota arrangement such as that for Brazil.

Trump canceled all steel and aluminum quotas, exemptions and exclusions in April to strengthen the metals tariffs, raising the effective rate.

A second trade source told Reuters that industry officials were pressing for a clearly defined steel quota arrangement for Mexico, given past import surges from Mexico. U.S. officials have long sought to curb the transshipment of steel products from third countries such as China via Mexico to the United States.

Mexican Economy Minister Marcelo Ebrard told reporters at a morning event that the government had argued to U.S. officials that the tariffs were unjustified, noting the United States runs a trade surplus with Mexico in steel and aluminum.

"Putting a tariff on a product where you have a surplus is quite debatable because the objective of the tariff is to reduce the deficit," he added.

Ebrard said countries like the UK had been exempted from similar measures and urged the U.S. to do the same with Mexico. He warned the tariffs would hurt jobs and supply chains in both countries due to their economic integration.

Source: Reuters

Risk Warnings and Disclaimers

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Diana Wallace

A federal appeals court allowed President Donald Trump's most sweeping tariffs to remain in effect on Tuesday while it reviews a lower court decision blocking them on grounds that Trump had exceeded his authority by imposing them.

The decision by the U.S. Court of Appeals for the Federal Circuit in Washington, D.C. means Trump may continue to enforce, for now, his "Liberation Day" tariffs on imports from most U.S. trading partners, as well as a separate set of tariffs levied on Canada, China and Mexico.

The appeals court has yet to rule on whether the tariffs are permissible under an emergency economic powers act that Trump cited to justify them, but it allowed the tariffs to remain in place while the appeals play out.

The Federal Circuit said the litigation raised issues of "exceptional importance" warranting the court to take the rare step of having the 11-member court hear the appeal, rather than have it go before a three-judge panel first. It scheduled arguments for July 31.

The tariffs, used by Trump as negotiating leverage with U.S. trading partners, and their on-again, off-again nature have shocked markets and whipsawed companies of all sizes as they seek to manage supply chains, production, staffing and prices.

The ruling has no impact on other tariffs levied under more traditional legal authority, such as tariffs on steel and aluminum imports.

A three-judge panel of the U.S. Court of International Trade ruled on May 28 that the U.S. Constitution gave Congress, not the president, the power to levy taxes and tariffs, and that the president had exceeded his authority by invoking the International Emergency Economic Powers Act, a law intended to address "unusual and extraordinary" threats during national emergencies.

The Trump administration quickly appealed the ruling, and the Federal Circuit in Washington put the lower court decision on hold the next day while it considered whether to impose a longer-term pause.

The ruling came in a pair of lawsuits, one filed by the nonpartisan Liberty Justice Center on behalf of five small U.S. businesses that import goods from countries targeted by the duties and the other by 12 U.S. states.

Trump has claimed broad authority to set tariffs under IEEPA. The 1977 law has historically been used to impose sanctions on enemies of the U.S. or freeze their assets. Trump is the first U.S. president to use it to impose tariffs.

Trump has said that the tariffs imposed in February on Canada, China and Mexico were to fight illegal fentanyl trafficking at U.S. borders, denied by the three countries, and that the across-the-board tariffs on all U.S. trading partners imposed in April were a response to the U.S. trade deficit.

The states and small businesses had argued the tariffs were not a legal or appropriate way to address those matters, and the small businesses argued that the decades-long U.S. practice of buying more goods than it exports does not qualify as an emergency that would trigger IEEPA.

At least five other court cases have challenged the tariffs justified under the emergency economic powers act, including other small businesses and the state of California. One of those cases, in federal court in Washington, D.C., also resulted in an initial ruling against the tariffs, and no court has yet backed the unlimited emergency tariff authority Trump has claimed.