US and China agree framework to restore trade truce

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The US and China have agreed a framework that restores a truce in their trade war after two days of negotiations. Here’s what you need to know.

What have the US and China agreed? The two economic superpowers have agreed a framework that restores a truce in their trade war after two days of marathon negotiations in London. The breakthrough came late last night but few details of the new framework were shared. Li Chenggang, China’s vice-minister of commerce, said the sides had agreed to implement the consensus reached in Geneva, according to state news agency Xinhua. That included an agreement by both countries to slash their respective tariffs by 115 percentage points and provided a 90-day window to resolve the trade war.

What happens now? The US negotiating team, including commerce secretary Howard Lutnick, Treasury secretary Scott Bessent and US trade representative Jamieson Greer, returned to Washington overnight to present the deal to President Donald Trump. The Chinese delegation, led by He Lifeng, a vice-premier responsible for the economy, returned to Beijing. The negotiations were launched to ensure Chinese exports of rare earths to the US and American technology export controls on China did not derail broader talks between the sides. Here’s the full readout from the talks.

• Emerging markets: Trump’s trade war will depress growth in almost two-thirds of developing economies this year, the World Bank has warned.

• Global economy: The tariff war brings with it unpredictability and a consequent loss of confidence, writes Martin Wolf.

• EU-China trade: Brussels has imposed anti-dumping duties on Chinese plywood imports, days after Beijing tried to ease trade tensions.

Here’s what else we’re keeping tabs on today:

• US inflation: Figures released today are expected to show an acceleration in consumer price growth last month.

• Companies: Oracle is expected to report an increase in fourth-quarter revenue, helped by robust demand for its cloud services. Canada’s Dollarama reports first-quarter results.

• Economic data: Mexico’s national statistics agency is expected to report industrial output. Its central bank publishes its twice yearly financial stability report.

• Israel: Prime Minister Benjamin Netanyahu’s coalition is bracing for a crunch vote today in the Knesset. Here’s why.

Five more top stories

1. The mayor of Los Angeles has announced a curfew for the downtown area that has been at the centre of four days of protests marked by conflicts with police and vandalism. The move comes as Trump defended his decision to deploy hundreds of marines and vowed to “liberate” California’s largest city.

• The ‘enemy within’: Sending the National Guard into LA is the clearest step yet towards authoritarianism, writes Edward Luce.

2. Elon Musk has said he “regrets” some of the posts he made about Donald Trump on his social media platform X last week, “they went too far”. Allies of the two have urged the US president and his billionaire backer to repair their relationship which imploded last week. Supporters fear the damaging spat could impact the administration’s plans for tax cuts and deregulation. Here’s more on Musk’s overnight comments.

3. Private market funds have underperformed large-cap US stocks over commonly measured time horizons for the first time in nearly a quarter of a century. The data, which measures private funds based on actual cash flows and does not depend on voluntary reporting, comes after a number of years in which the global buyout industry has struggled to purchase and sell companies.

4. Meta plans to invest about $15bn in data-labelling start-up Scale AI and hire the group’s co-founder and top researchers, in one of the biggest deals of its kind. The agreement would give Meta a 49 per cent stake and value the start-up at roughly $28bn, according to people with knowledge of the matter. The deal could be announced as soon as today.

• Snap’s ‘Specs’: The social media company plans to relaunch its smart glasses as it rejoins a costly battle over AI-powered wearable devices with Meta, OpenAI and Apple.

5. US oil production will fall next year for the first time since the Covid-19 pandemic, according to a government forecast. The report highlights the stresses facing the sector, with rising supply from the Opec+ cartel and anxiety over Trump’s trade war pushing down crude prices.

Visual investigation

In March, Mexican authorities seized a 46,000-tonne vessel suspected of illegally importing fuel from the US. A subsequent raid on nearby storage facilities uncovered weapons, tanker trucks and 10mn litres of diesel. But this was no isolated case. The FT has uncovered dozens of suspicious shipments, with millions of barrels of fuel falsely declared as industrial lubricant. Our latest visual investigation explores how the sophisticated smuggling operations fund Mexico’s cartels.

We’re also reading . . . 

• CEO pay and perks: Executives may find the idea of disclosing less about their packages attractive, but this carries its own risks, writes Brooke Masters.

• WPP: Outgoing chief Mark Read pushed to adopt AI but, for an ad agency that still bills some clients by the hour, the disruption of its own business has unsettled investors.

• MathGPT: New AI models could soon pose a threat to the world’s top mathematicians, writes Anjana Ahuja.

Chart of the day 

The world’s ocean temperatures reached the second-highest level on record for May, capping an “alarming” two-year streak of rapid warming, according to the EU’s earth observation service Copernicus. Oceans have historically helped absorb higher land temperatures but scientists say this expectation is increasingly being challenged. Read more on the growing number of “marine heatwaves”.

Take a break from the news

When Nadya Tolokonnikova started “Police State”, a 10-day performance piece at the Museum of Contemporary Art in Los Angeles last week, she could not have known the city would soon be plunged into unrest. “They always pick the scapegoat,” the founding member of Pussy Riot tells the FT. “In Russia it’s people who speak out against the regime. In America and Los Angeles, it’s migrants.”