Key events
US-China talks extension ‘likely’ as Trump targets ‘world tariff’
Good morning, and welcome to our live coverage of business, economics and financial markets.
After the US and EU announced the outline of a trade deal that would limit tariffs to 15%, it looks like talks with China could be the next on the agenda, with an extension of a truce in the trade war “likely”, according to a top official in the Trump administration.
US Treasury chief Scott Bessent arrived yesterday in Sweden, alongside China’s vice premier He Lifeng, according to Reuters. Back in the US, Howard Lutnick, the commerce secretary told Fox News that a delay to a higher tariff deadline was probable:
Is that a likely outcome? Sure, it seems that way, but let’s leave it to President Trump to decide.
Donald Trump triggered financial market chaos after slapping tariffs at 145% on China. However, in May he announced a 90-day pause, lowering tariffs to (a still significant) 30%. That left a deadline of 12 August for the talks, but it is
US trade representative Jamieson Greer told the CNBC news channel he did not expect “some kind of enormous breakthrough today” at the talks in Stockholm, although he flagged that a deal last month to speed up rare earth metal imports from China to the US would be on the agenda. He said:
What I expect is continued monitoring and checking in on the implementation of our agreement thus far, making sure that key critical minerals are flowing between the parties and setting the groundwork for enhanced trade and balanced trade going forward.
It came after the US and EU announced a deal to limit tariffs to 15%. The end of market uncertainty appeared to be welcomed at first by markets on Monday – only for the mood to sour somewhat later in the day. The French prime minister, François Bayrou, said the EU had capitulated to Donald Trump, and said it was a “dark day” for the EU.
Trump on Monday suggested that he could impose a “world tariff” on all of the countries that have not agreed a trade deal. That tariff could be 15% or 20% – meaning that, after all the negotiating effort, the EU could be left with similar terms to the rest of the world.
At his golf course in Scotland yesterday, while visiting UK Prime Minister Keir Starmer, Trump said:
I would say it’ll be somewhere in the 15 to 20% range. Probably one of those two numbers.
On the prospects of Chinese talks, Trump said:
I’d love to see China open up their country.
Back in May, Trump had said that China had already “agreed to open up” – but it appears there may be more work to be done.
The agenda
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9:30am BST: Bank of England mortgage approvals (June; previous: 63,032; consensus: 63,000)
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9:30am BST: Bank of England consumer credit (June; previous: £859m; consensus: £1.2bn)