Tensions over trade dispute dampened by American efforts
In a significant development, the United States and China reached a tentative trade deal on June 27, 2025, aiming to de-escalate ongoing trade tensions. However, the agreement is partial, leaving many key issues unresolved.
The deal follows months of intense tariff escalations, with tariffs on Chinese goods peaking at 145% and on US goods up to 125%. These have since been reduced to 30% and 10%, respectively. The agreement notably includes China agreeing to ease restrictions on critical exports such as magnets and rare earth minerals, crucial for US manufacturing and technology sectors. In exchange, the US will lift certain trade restrictions on China, although specific details, particularly on export controls, remain unclear.
Despite this development, core concerns about China's trade practices and the US trade deficit have not been fully addressed. The negotiations and tariff tit-for-tat escalations during 2025 have reshaped global trade dynamics, contributing to uncertainty and disruptions in supply chains. Both countries’ imposition of heavy tariffs and export controls have affected global merchandise trade, with key sectors like aerospace, technology, and agriculture impacted by retaliatory measures.
The ongoing US-China trade friction has led to a realignment of trade flows as countries and companies seek alternatives to avoid tariffs and restrictions. For example, the UK has formalized some trade deals reducing tariffs on certain exports, distinguishing its position from others. The US-China trade relationship, therefore, continues to influence global trade patterns and market strategies, prolonging a period of instability and cautious engagement among multinational businesses.
Meanwhile, in a medical breakthrough, eight children have been born using a pioneering IVF treatment in Britain, where a couple's genes are removed from a fertilized egg, leaving the defective DNA behind, and then injected into the egg of a healthy woman. All children are developing normally, although three had detectable levels of diseased mitochondria.
Elsewhere, around 74% of Mexico's illegal guns come from the US. An increasing number of African countries are using the yuan for trade and investment. Germany rejected the proposed budget as too large, and other parties raised concerns about its rollout and negotiation process. The share of dollar-denominated loans in emerging Asian economies decreased by 16% between Q1 2022 and Q2 2024, largely due to Chinese banks shifting to yuan-based lending.
In the US, President Donald Trump announced tariffs for around 150 countries will be about 15%. Thom Tillis, a Republican senator, is prepared to tangle with the 'disrespectful'. The context for this statement is not provided in the paragraph. Mexico's president called on Washington to do more to stop drug traffickers on US territory and to halt the flow of weapons across the border. Goldman Sachs projects the US' effective tariff rate will peak even higher than previously thought.
The share of US adults who want lower immigration has fallen for the first time in four years. However, the percentage of US adults who view immigration as good for the country has reached a record 79%, according to Gallup. The US reportedly denied South Africa's envoy to Washington a visa, potentially signifying a frosty relationship between the two countries. Union Pacific has hired bankers for a possible railroad bid.
European Commission President Ursula von der Leyen unveiled a €1.98 trillion budget, with €451 billion allocated to strengthen European industry. The decline in illegal crossings at the US southern border may be due to President Donald Trump's hardline immigration policies. The White House has moved to tamp down trade war fears, but analysts warn Washington's protectionist direction remains unchanged.
Senior officials criticized the haphazard announcement of the budget and complained about being kept in the dark. Canada has announced new steel tariffs. France is gaining support within the European Union for a harder line against pressure from Washington. Trump has toned down anti-China rhetoric to secure a trade deal and a summit with China's leader, according to Bloomberg.
- The US-China trade deal, despite its partial nature, has shifted the focus of businesses in key sectors like aerospace, technology, and agriculture to seek alternatives to avoid tariffs and restrictions, reflecting a change in approaches in global finance and business.
- The ongoing trade tensions between the US and China have resulted in an increased use of the yuan for trade and investment in Africa, altering the political and economic landscape of global finance and business.
