A USA China Trade Deal? But Who Gave In To Who?

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Donald Trump

According to Washington the USA and China have reached a new trade deal. But no details were provided, leaving markets hopeful but suspicious that this might be just more Trump overstatement.

Both countries and the global economy need a trade deal that works for both nations, but if a new trade deal has in fact been reached, the markets will want to know who conceded to who.

For now, hopium rules in the global stock casinos, though with each passing day the global just in time supply chains get more fragile.

Asia-Pacific as markets cheer India-Pakistan ceasefire and U.S.-China trade deal

Updated Mon, May 12 2025 12:21 AM EDT

Asia-Pacific markets rose Monday after the White House announced a “trade deal” with China without providing specifics.

Both countries alluded to a positive conclusion of the high-stakes trade talks, with U.S. officials touting a deal to reduce its trade deficit, while Chinese leaders said that they have arrived at an “important consensus.”

U.S. Treasury Secretary Scott Bessent noted that the talks yielded “a great deal” of productivity. Meanwhile, Chinese Vice Premier He Lifeng said a joint statement containing “good news for the world” would be released on Monday.

Indian stocks also led gains in the region following India’s ceasefire with Pakistan over the weekend. The arch rivals were involved in intense firing — the worst in nearly three decades — with both sides exchanging fire with missiles and drones.

The benchmark Nifty 50 surged 2.29% at the open while the BSE Sensex gained 2.27%.

Hong Kong’s Hang Seng Index pared early gains to 0.88%, while mainland China’s CSI 300 index increased 0.61%.

Japan’s benchmark Nikkei 225 fell 0.17% while the broader Topix index lost 0.21% in choppy trade.

In South Korea, the Kospi index rose 0.49% while the small-cap Kosdaq edged 0.12% higher.

Over in Australia, the benchmark S&P/ASX 200 increased 0.17%.

U.S. futures jumped as investors await further details on the trade deal between the U.S. and China.

This comes after declines in the three key benchmarks on Wall Street in last Friday’s session.

The 30-stock Dow Jones Industrial Average lost 119.07 points, or 0.29%, and settled at 41,249.38. Meanwhile, the broad-based S&P 500 inched down 0.07%, closing at 5,659.91, while the Nasdaq Composite ended the session little changed, ending at 17,928.92.

Asia markets live: Stocks mostly rise

Dow futures jump 400 points as traders await details on U.S.-China trade deal: Live updates

Updated Mon, May 12 2025 11:01 PM EDT

U.S. stock futures jumped Sunday night after the Trump administration announced a “trade deal” with China following negotiations over the weekend in Switzerland.

Dow Jones Industrial Average futures rallied 422 points, or 1%. S&P 500 and Nasdaq-100 futures climbed 1..38% and 1.94%, respectively.

Without providing specifics, Treasury Secretary Scott Bessent said two days of trade talks with Chinese officials in Geneva were “productive” and yielded “a great deal” of productivity. Bessent said details would be provided in a briefing Monday morning.

“This is a huge positive in the right direction for the markets,” Dan Ives, Wedbush Securities global head of technology research, said in a note to clients. “We would characterize this weekend so far as a best case scenario that shows the framework for a bigger US/China deal is now on the table.”

Tensions between China and the U.S. soared after President Donald Trump last month unveiled 145% tariffs on imported goods from China. Beijing then retaliated with 125% duties of its own targeting U.S. goods.

Commerce Secretary Howard Lutnick said Sunday that the 10% baseline tariff rate on imports from other countries is likely to “be in place for the foreseeable future,” echoing Trump’s comments from days prior.

All three major averages are coming off their first losing week in three. The S&P 500 and Nasdaq Composite shed 0.5% and 0.3%, respectively. The Dow slipped 0.2% last week.

Investors this week will look for signs on how the rising trade tensions are impacting the economy. The consumer price index reading for April is due Tuesday morning, while retail sales and the producer price index — another inflation measure — are set for release on Thursday.

Stock market today: Live updates

In other news, a warning from Bloomberg. A US-UK trade deal with little to no positive effect for the UK economy.

This Key Stock Market Indicator Is Flashing Red

May 9, 2025 at 10:36 PM GMT+1

A stock-market indicator has entered a phase historically associated with the worst return prospects for the S&P 500 Index. The Equity Market Regime Model, a Bloomberg Intelligence tool that tracks the benchmark stock gauge and clusters periods into three phases—accelerated growth (green), moderate growth (yellow) and decline (red)—fell into the cautious red zone in March and April. 

The timing coincided with Donald Trump’s chaotic tariff threats and retreats, which managed to upend financial markets, dim Corporate America’s outlook for profit growth and, at least temporarily last month, destabilize key pillars of the US economy.

The seven times that the model landed here in the past were followed by a 5.6% average drop in the S&P 500 in the next 12 months. That said, the red regime, which follows 21 months in the neutral “yellow” zone, is still in the early innings for most of the model’s components. While this may mean there are more losses ahead, unpredictable US trade policy has left investors debating whether the worst part of the selloff is over. 

A positive development for markets would be a broader retreat by Trump as tariff talks begin with China in Geneva this weekend. But even if—as with the recent framework deal with the UK—the administration strikes more deals and declares victory, the damage to America’s economy and its future may be done.

“There’s a growing belief that the Trump administration will back off its aggressive tariff policy once further weakness begins to show up in jobs growth,” said Seth Merrill, chief investment officer at Crewe Advisors. “But here’s the risk: By the time that happens it may be too little, too late since earnings growth is already slowing, which may trigger more selling if the economic outlook deteriorates further from here.” —David E. Rovella

This Key Stock Market Indicator Is Flashing Red: Evening Briefing Americas - Bloomberg

Keir Starmer dealt major economic blow in US deal amid Donald Trump's trade war

9 May 2025

Economists have warned the UK's trade deal with he US was unlikely to significantly boost growth directly.

The deal removes tariffs on UK steel and aluminium imports to the US, and cuts the levy on cars from 27.5% to 10%, offering British luxury carmakers like Jaguar Land Rover a reprieve.

But the National Institute of Economic and Social Research (Neisr) said the boost for UK gross domestic product (GDP) will be minimal.

This is because a blanket 10% tariff imposed on imports of most goods by Donald Trump as part of his sweeping "liberation day" announcement remains in place, though talks are ongoing in a UK effort to ease it.

Ben Caswell, Neisr's senior economist, said: "Whilst the new trade deal with the US constitutes a political win for the Government, the direct impacts on UK GDP are likely to be very small, given we export just £9 billion worth of cars to the US each year and the vast majority of goods won't benefit from this tariff relief announcement."

But he added that it would "deliver a welcome boost to business confidence amid the UK's fragile economic outlook this year".

Matthew Ryan, head of market strategy at finance firm Ebury, added that while it "unlikely to have any real implications for the UK economy", and added that the terms of the deal are "not overly favourable" for Britain.

"Let's not forget that this is also far from a full-blown trade agreement, which will likely take months, if not years, to be finalised, and it will still be some time before the finer details are ironed out."

But others said the lack of significant concessions demanded of the UK by Washington was a plus.

The final details of the deal are still to be ironed out with the agreement on steel and automobile tariffs is expected to be concluded imminently, given the urgent need to protect jobs in those sectors.

The UK-US trade deal was urgently needed to protect as many as 150,000 livelihoods, Business Secretary Jonathan Reynolds said.

The minister rubbished suggestions the UK is no better off than before Mr Trump's tariffs were first introduced.

More

Keir Starmer dealt major economic blow in US deal amid Donald Trump's trade war

Finally, in EV news, yet another EV fire, this time taking out an expensive home.

Electric car bursts into flames on homeowners' driveway and engulfs £550,000 family home in terrifying suburban inferno

Published: 14:35, 9 May 2025 | Updated: 17:53, 9 May 2025

The horrifying moment an electric car suddenly burst into flames on a driveway has been captured on CCTV, as the vehicle sparked a raging blaze which spread to a van and a family home.

The shocking images show a fireball tearing through vehicles outside the £550,000 house in Chandler's Ford, Hampshire, in the early hours of this morning.

The car was parked on the driveway and was charging overnight when it caught fire at around 5am. 

Photographs taken after the blaze reveal the shocking extent of the damage, including the wreckage of three vehicles - one of which is a van. The front of the house was also badly burned.

Aside from the van, all the vehicles on the drive have been reduced to charred remains. The make and model of the vehicles is unclear.

The home on a quiet road belongs to a young family, according to neighbours.

Thankfully, the family were able to get out safely and no casualties have been reported.

More, + video.

Electric car bursts into flames on homeowners' driveway and engulfs £550,000 family home in terrifying suburban inferno | Daily Mail Online

Global Inflation/Stagflation/Recession Watch.

Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.

Are Trump’s tariffs already boosting US inflation?

11 May 2025

The first hints of the impact of Donald Trump’s far-reaching tariffs are expected to show up in US inflation when figures for April are published next week.

Economists polled by Bloomberg are forecasting Tuesday’s data will show annual consumer price growth of 2.4 per cent, unchanged from March.

However, the month-on-month rate is expected to climb to 0.3 per cent after a 0.1 per cent decline in prices in the previous month. The anticipated increase is partly a result of rising demand for cars as buyers tried to act ahead of the introduction of tariffs, according to analysts at Bank of America.

“Core goods inflation likely accelerated . . . owing in part to tariffs and related consumer behaviour,” wrote BofA economists Stephen Juneau and Jeseo Park. “Tariff revenue and the effective tariff rate rose by about 2 percentage points in April, which should put pressure on goods prices more broadly. Meanwhile, we expect auto inflation rose on the month due in part to frontloaded demand in anticipation of higher prices from tariffs.”

Still, BofA characterised April’s data as representative of the calm before the “tariff storm”. Economists and investors widely expect tariffs to materially increase inflation, probably beginning this summer, when US companies have exhausted existing inventories and will need to start selling new products at higher prices. BNP Paribas analysts anticipate that year-over-year core CPI will peak at 4.4 per cent by the fourth quarter of 2026.

Markets are pricing two or three interest rate cuts from the Federal Reserve later this year, but a bigger-than-expected burst of inflation could prompt the central bank to lower borrowing costs more slowly. Kate Duguid

Are Trump’s tariffs already boosting US inflation?

ECB launches digital euro ‘innovation platform’

Bank garners around 70 private “pioneers” and “visionaries” to discuss CBDC

06 May 2025

The European Central Bank has launched a platform to explore the payment functionalities and innovative use cases of the digital euro. In a statement on May 5, the bank said around 70 market participants – merchants, fintech companies, start-ups, banks and other payment service providers – had joined the venture. They had been picked from more than 100 applications after the ECB issued a call for interest last year.

More, subscription required

ECB launches digital euro ‘innovation platform’ - Central Banking

Is It Too Late for the Digital Euro?

Experts weigh in on the digital euro future, challenges, and whether Europe needs it.

May 8, 2025

Key Takeaways:

·         The digital euro isn’t meant to replace cash, but experts question whether it’s needed at all.

·         Privacy concerns and competition from stablecoins could slow down adoption.

·         A fully functional digital euro may not arrive before 2027 or even 2030.

Europe is moving closer to launching a digital euro, a new form of money designed for the digital age. But experts are still debating a key question: does Europe really need it, especially when stablecoins and tried-and-tested systems are already in place?

At the UN:BLOCK conference, held on April 2 3–24 in Riga, industry leaders shared their thoughts on the future of the digital euro. Speaking with Cryptonews, they discussed the hopes and concerns surrounding this new tool, what problems it aims to solve, and the risks it could pose to traditional banks.

Reinis Znotins, Co-Founder of UN:BLOCK, pointed out that building a successful digital currency also depends on a supportive regulatory environment. In his view, Latvia is already setting an example in Europe:

Latvia is quickly establishing itself as a leading Web3 hub in Europe. With a bold vision for the digital asset economy, it offers a regulatory environment tailored to the needs of global blockchain and crypto companies.

Digital Euro Is ‘Complement to Cash, Not a Replacement’

Aivars Belis, CTO at Next Generation, also shared his perspective with Cryptonews. He said concerns about privacy around the digital euro, a type of Central Bank Digital Currency (CBDC), may be overstated:

The EU economy is regulated and already highly transparent. Financial institutions have operated within a well-regulated environment for a very long time, and for the overwhelming majority of them, regulations are synonymous with security, guarantees, and reduced fraud risk. […] Given these points, we believe it would be inaccurate to characterize reluctance toward CBDCs as a widespread phenomenon.

Belis emphasized that CBDC is not meant to replace cash but to provide an alternative:

Privacy is undoubtedly important in general. However, the key feature of CBDCs lies in the technology that enables low costs, high speed, and robust security. […] CBDCs are not mandatory but rather an alternative option to existing payment methods.

He also noted that stablecoins and the digital euro aren’t designed to serve the same function, describing the CBDC as “a complement to cash, not a replacement.” Additionally, it could be seen as a tool for European integration, helping build a unified digital payment infrastructure across the eurozone.

Belis noted a key advantage of the CBDC over private entity:

MiCA-compliant stablecoins, even with their improved regulatory safeguards, ultimately represent a claim on a private entity. This creates a fundamentally different risk profile from central bank money, which is a direct liability of the central bank itself. […] When a transaction settles in central bank money (whether physical cash or a digital euro), the settlement is absolute with no counterparty risk.

He also pointed out some of the key problems a digital euro could address, calling them “low transaction speed, higher transaction costs, and fragmentation of the financial landscape.”

When it comes to the timeline, Belis warned against expecting quick results:

While the technological infrastructure is largely ready for CBDC adoption, financial systems cannot—and should not—transform instantaneously. […] Based on current trajectories, full implementation could realistically span several years.

More

Is It Too Late for the Digital Euro?

Covid-19 Corner

This section will continue only occasionally when something of interest occurs.

 

Technology Update.

With events happening fast in the development of solar power and graphene, among other things, I’ve added this section. Updates as they get reported.

Scientists blast through battery world record in major hope for breakthrough new

9 May 2025

Scientists have broken through a battery world record and could be on their way to entirely new kinds of batteries.

The breakthrough could finally allow for the production and widespread use of solid-state batteries. The technology is seen as a key technology of the future – since they have more capacity than existing lithium-ion batteries, which are also flammable – and could one day be used to power electric cars and other technologies.

But solid-state batteries yet to receive widespread adoption and production because of a range of difficulties with manufacturing and using the batteries.

Now researchers say that a new material could help solve some of those problems and could be a move towards actually introducing the batteries.

The researchers built a new material out of lithium that is 30 per cent faster than all previously known substances. The material – made of lithium, antimony and scandium – not only set the record but could lead to the development of other practical applications.

“We believe that our discovery could have broader implications for enhancing conductivity in a wide range of other materials,” said Jingwen Jiang, an author on the paper describing the findings. The same principles that led to the development of the new batteries could also be applied to other breakthroughs, the researchers suggest.

“By incorporating small amounts of scandium, we have uncovered a new principle that could prove to be a blueprint for other elemental combinations,” said Hubert Gasteiger, from the Technical University of Munich. “While many tests are still needed before the material can be used in battery cells, we are optimistic.”

The breakthrough is reported in a new paper, ‘Scandium Induced Structural Disorder and Vacancy Engineering in Li3Sb – Superior Ionic Conductivity in Li3−3xScxSbv’, published in the journal Advanced Energy Materials.

Scientists blast through battery world record in major hope for breakthrough new technology

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World Debt Clocks (usdebtclock.org)

A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank.

Ron Paul