China called on its companies doing business in the US to avoid extending their price wars there — a sign that Beijing is eager to maintain a fragile trade truce reached with Washington https://t.co/MR5EXfSjog ...

Trade Relations - The US-China trade truce is extended until November, with no immediate plans for changes [1] - A potential summit between President Trump and Jingping is anticipated before year-end [1] - US soybean producers are expressing concerns over China's lack of soybean purchases, potentially impacting US exporters [2] - India is exploring closer trade ties with China amid US trade negotiations [2] US-India Trade Dynamics - India was surprised by the tariffs imposed by the US [3] - India is seeking alternative trade relationships due to potential deterioration in its relationship with the US [4] - The US is concerned about India's purchase of Russian oil, while China is not similarly penalized [4][5] - India defends its right to purchase oil at the cheapest price, highlighting a strained relationship with the US [6] Trump's Investments - Donald Trump's investments and debt filings for the year include holdings in companies like Home Depot and Mattel [7] - The US president is not obligated to divest assets upon taking office, breaking with precedent [8] - The filings reveal details of the US president's investments, raising questions about potential conflicts of interest with his policies [8]

Treasury Secretary Scott Bessent said the U.S. is "very happy" with the current tariff situation with China, indicating there likely won't be any immediate changes to the trade truce between the two countries. https://t.co/dCIRX3q3mZ ...

Trade Relations - US Treasury Secretary indicated satisfaction with current tariff arrangement with China [1] - The Trump administration aims to maintain calm ties before the trade truce expires in November [1]

Market Trends - Soybean prices fell below $10 per bushel [1] - US-China trade truce is likely delaying major grain-purchasing deals until late this year [1]

US-China Trade Relations - The US-China trade agreement status is uncertain, but a potential agreement exists [1] - The US is urging China to increase US soybean purchases [1] - Increased soybean purchases could facilitate the rollover of the US-China trade truce [2] - China has been diversifying soybean sources, but can easily purchase from the US at a good price [3] - Increased trade could strategically improve relations in anticipation of a potential Xi Jinping and Donald Trump meeting later this year [4] - China meeting the US halfway on soybean purchases is seen as an easy win [5] Soybean Market Dynamics - US farmers are approaching soybean harvest season with a large supply to sell [2] - China needs to buy a lot of soybeans [3] - Soybean purchases are beneficial for US farmers and businesses [4]

Trade Relations - US President stated nearing a deal with China to extend the trade truce [1] - The agreement aims to reduce tit-for-tat tariff hikes between the two countries [1] - The deal includes easing export restrictions on rare earth magnets and certain technologies [1]

Market Trends - Gold price declined following a stronger dollar after a tariff deal between the US and the European Union [1] - Market focus shifts to the potential extension of a trade truce between the US and China [1]

Trade Talk Expectations - The most likely outcome of the US-China trade talks is a continuation of dialogue, an extension of the trade truce, and a potential fall meeting between the presidents [2][3] - A grand deal is unlikely even after a 90-day extension due to the need for structural reform in China's non-market economy [6] China's Economic Constraints - China's economy faces significant pressure, including a slowing economy, deflation, youth unemployment, a housing crisis, and demographic challenges [4] - These economic pressures weaken China's negotiating position [5] Trade Dynamics - China's exports to the US are down, but exports to other Asian countries are increasing significantly [7] - Approximately 17% of Chinese exports go to the United States, leaving 83% of the world for continued trade [7][8] - China and Canada are not analogous because Canada's exports mostly go to the United States [7] Structural Reform Challenges - Achieving a more balanced trading relationship with China requires structural reform, which will be difficult and time-consuming for China to implement [6] - Addressing overcapacity in industries like steel and electric vehicles would require provincial leaders to close factories and furlough large numbers of workers, posing a significant challenge [6]

Economic Outlook - Despite the trade truce, economic numbers appear soft, necessitating a broader perspective [1] - Macro policy improvements in September of last year, along with front-loaded activity in Q1, led to solid data in Q4 of last year and Q1 of this year [2] - The underlying economic momentum is moderating due to trade tariff issues with the US and increasing external uncertainty [2][3] - The baseline expectation is for sequential growth of the Chinese economy to slow from approximately 66% quarter-on-quarter in Q1 to around 35% in Q2, and further to 3% in Q3 [3] - PMI numbers align with expectations of moderating economic momentum [4] Sector Performance - Diverging trends exist across different sectors, with China's exports to the US down 40% in April and May [5] - Sectors receiving policy support, such as training subsidies and equipment upgrades, are performing well [6] - The housing sector continues to be a drag on the economy and has not yet bottomed out [6] - Consumer sentiment outside of policy support areas remains at a historical low [7] Policy Implications - Domestic and consumption support are crucial for policy focus this year [7] - Subsidies for consumer durables and autos have shown some impact, but their effect will fade by year-end [7] - Further policy support, particularly for services consumption, is needed [8]