Morning updates on business, economics, and financial markets:
Following agreements between the US and EU to cap tariffs at 15%, discussions with China could be next, with an extension of the trade truce described as "likely" by a senior official in the Trump administration.
US Treasury Secretary Scott Bessent met with China’s Vice Premier He Lifeng in Sweden yesterday, as reported by Reuters. Meanwhile, Commerce Secretary Howard Lutnick indicated on Fox News that postponing a planned tariff increase was probable:
"Is that a likely outcome? Sure, it seems that way, but the final decision rests with President Trump."
Earlier this year, Trump caused market turbulence by imposing 145% tariffs on Chinese goods. In May, he temporarily reduced them to 30%, setting a 12 August deadline for negotiations. However, an extension now appears possible.
US Trade Representative Jamieson Greer told CNBC he did not anticipate a "major breakthrough" during the Stockholm talks but noted that discussions would focus on ensuring the smooth flow of rare earth metals from China to the US, as agreed last month.
"The focus will be on monitoring progress, maintaining the flow of critical minerals, and laying the groundwork for more balanced trade."
Meanwhile, the US-EU tariff agreement initially eased market concerns on Monday, though sentiment wavered later in the day. French Prime Minister François Bayrou criticized the deal as a capitulation to Trump, calling it a "dark day" for the EU.
Trump, during a visit to Scotland, suggested implementing a global tariff of 15% to 20% on nations without trade agreements, potentially leaving the EU with terms similar to other countries.
"It’ll likely be in that range—15% or 20%," he said, before reiterating his desire for China to open its markets further.
Despite Trump’s claim in May that China had already "agreed to open up," negotiations appear ongoing.
### Today’s Economic Updates
- 9:30 AM BST: Bank of England mortgage approvals (June; previous: 63,032; expected: 63,000)
- 9:30 AM BST : Bank of England consumer credit (June; previous: £859m; expected: £1.2bn)
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