Hello,
U.S. and Chinese officials have agreed on a framework to get their trade truce back on track and remove China's export restrictions on rare earths. Will this be a durable resolution to longstanding trade tensions? There are not many signs.
U.S. Commerce Secretary Howard Lutnick has said the framework deal puts "meat on the bones" of an agreement reached in Geneva in May to ease bilateral retaliatory tariffs that had reached crushing triple-digit levels. Both sides will now return to present the framework to their respective presidents for approvals.
The World Bank isn't painting a rosy picture. The bank has cut its 2025 global growth forecast, dropping it to 2.3% - a chunky 0.4 percentage point cut. While they're not using the R-word (recession), the bank is warning this could be the weakest growth we've seen outside of a recession since 2008, thanks to Trump's steep tariffs.
Wall Street, meanwhile, is keeping the faith. Investors have shrugged off President Trump's "Liberation Day" tariff announcements from April 2 that sent Wall Street in a tailspin. Traders are betting that cooler heads will prevail in negotiations with major trading partners.
Need proof? Just look at the S&P 500, which has bounced back completely from its post-tariff announcement slump and is now flirting with its February record high.
"The expectation is that they'll figure this out, and that the Liberation Day tariff levels are never going to be seen. You can't get to market valuations where we've got them and have those tariff levels get anywhere close to reality," says Scott Ladner, chief investment officer at Horizon Investments.
Still, some concrete progress from those London talks would help everyone sleep better.
Read the latest tariff headlines below. And if you like this newsletter or have suggestions on how we can make it better, send me an email to noel.randewich@thomsonreuters.com.
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