Economy

The suit, brought by 55 attorneys general, will help compensate victims and fund addiction treatment programmes.

The attorneys general of all 50 US states, Washington, DC, and four US territories have agreed to a $7.4bn settlement with drugmaker Purdue Pharma, the maker of OxyContin – the pain medication that allegedly fuelled a nationwide opioid addiction crisis in the United States.

The group, led by New Jersey Attorney General Matthew Platkin, announced the deal on Monday.

“While we know that no amount of money can erase the pain for those who lost loved ones to this crisis, this settlement will help prevent future tragedies through education, prevention, and other resources,” Platkin said in a news release.

“The Sacklers put greed and profit over human lives, and with this settlement, they will never be allowed to sell these drugs again in the United States,” Platkin added, referring to the family who owns Purdue Pharma.

The company’s payment is intended to resolve thousands of lawsuits against the drugmaker. The group of attorneys general said most of the settlement funds will be distributed to recipients within the first three years.

Payouts would begin after the drugmaker wins sufficient creditor support for its Chapter 11 bankruptcy plan. Money would go to individuals, state and local governments, and Native American tribes and the Sackler family would cede control of Purdue.

According to several attorneys general, Monday’s agreements do not include Oklahoma, which in 2019 reached a $270m settlement with Purdue Pharma and the Sacklers to resolve opioid-related claims.

Platkin said members of the Sackler family have confirmed their plan to proceed with the settlement.

The settlement will also help fund addiction treatment, prevention and recovery programmes over the next 15 years, according to the attorney general.

“This settlement in principle is the nation’s largest settlement to date with individuals responsible for the opioid crisis,” his office said.

Purdue has been the subject of a backlash for years over accusations that it fuelled the US opioid epidemic. The bankrupt Stamford, Connecticut-based pharmaceutical company was known for aggressively marketing its drug to doctors and patients and calling it nonaddictive although it is highly addictive.

Purdue responded to the settlement by calling it a “milestone”.

“Today’s announcement of unanimous support among the states and territories is a critical milestone towards confirming a Plan of Reorganization that will provide billions of dollars to compensate victims, abate the opioid crisis, and deliver opioid use disorder and overdose rescue medicines that will save American lives,” a Purdue spokesperson told Al Jazeera.

In June last year, the US Supreme Court rejected an earlier settlement that would have given the Sacklers broad immunity from opioid-related civil lawsuits. The Sacklers would have paid about $6bn under that settlement.

More than 850,000 people have died from opioid-related overdoses since 1999, according to the US Centers for Disease Control and Prevention, although deaths have recently declined.

Chinese President Xi Jinping reached Kazakhstan on Monday to attend the second China–Central Asia Summit, a high-stakes diplomatic gathering aimed at deepening Beijing’s economic and strategic ties with the region.

The summit, which will be held on Tuesday in the Kazakh capital Astana, comes at a time when China is intensifying its outreach to Central Asian countries amid shifting global power alignments — and mounting tensions in neighbouring Iran, which is roiled in an escalating conflict with Israel.

The summit will bring together the heads of state from all five Central Asian nations — Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan — along with Xi.

The Astana summit also carries symbolic weight: it is the first time that the five Central Asian nations are holding a summit in the region with the leader of another country.

So, what is the importance of the China-Central Asia Summit? And is China battling both the United States and Russia for influence in the region?

What’s on Xi’s agenda in Astana?

On Monday, Xi was greeted by Kazakh President Kassym-Jomart Tokayev and other senior officials at the airport in Astana. The Astana summit follows the inaugural May 2023 China–Central Asia Summit, which was held in Xi’an, the capital city of China’s Shaanxi province.

Xi is expected to be in Astana from June 16 to 18 and is scheduled to hold bilateral meetings with Kazakhstan’s leaders on Monday before the summit on June 17.

At the summit, he is expected to deliver a keynote speech and “exchange views on the achievements of the China-Central Asia mechanism, mutually beneficial cooperation under the framework, and international and regional hotspot issues,” said a Chinese Foreign Ministry spokesperson.

The office of Kazakhstan’s president noted that both countries are “set to further strengthen bilateral ties” and Xi will also chair “high-level talks with President [Tokayev] focused on deepening the comprehensive strategic partnership”.

Tokayev, who has been in office since 2019, is a fluent Mandarin speaker and previously served as a diplomat in China.

Zhao Long, a senior research fellow at the Shanghai Institutes for International Studies (SIIS), told Al Jazeera that Central Asian countries see their partnership with China as a deep, multifaceted cooperation grounded in shared strategic and pragmatic interests.

“The alignment with China helps Central Asian states enhance their regional stability, pursue economic modernisation, and diversify their diplomatic portfolios,” said Zhao. Where Central Asia has abundant energy resources, he said, China offers vast markets, advanced technology, and infrastructure expertise.

Last Friday, Lin Jian, a Chinese Foreign Ministry spokesperson, told a news briefing that establishing “the China-Central Asia mechanism was a unanimous decision among China and the five Central Asian countries, which dovetails with the region’s common desire to maintain stability and pursue high-quality development”.

Since China first formalised and chaired the China-Central Asia Summit in May 2023, Lin said, “China’s relations with Central Asian countries have entered a new era … injecting fresh impetus into regional development and delivering tangibly for the peoples of all six countries.”

“We believe through this summit, China and five Central Asian countries will further consolidate the foundation of mutual trust,” Lin added.

“During the summit, President Xi will also meet with these leaders and lay out the top-level plan for China’s relations with [the] five Central Asian countries,” said the spokesperson.

SIIS’s Zhao said Xi’s attendance at the second summit sends a clear message: “China places high strategic importance on Central Asia.”

What’s ‘C5+1’ – and is China racing the US for influence?

Experts are dubbing the China-Central Asia Summit as a C5+1 framework, because of the five regional nations involved.

The United States first initiated the concept of such a summit with all five Central Asian nations in 2015, under then-US President Barack Obama. But at the time, the conclave was held at the level of foreign ministers. Then-US Secretary of State John Kerry led the first meeting in September 2015 on the sidelines of the United Nations General Assembly (UNGA) in New York.

In January 2022, Indian Prime Minister Narendra Modi held a virtual summit with the five Central Asian state heads, and then in June 2025, he invited them for a follow-up conclave in India.

Meanwhile, in 2023, Xi hosted the leaders in Xi’an. Four months later, then-US President Joe Biden hosted the C5 state heads on the sidelines of the UNGA in New York. It was the first time a US president met with Central Asian heads of state under this framework.

But current US President Donald Trump’s tariff policies could upset that outreach from Washington. Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan have all been tariffed at 10 percent.

Trump initially imposed an even higher 27 percent tariff on imports from Kazakhstan, the region’s largest economy, though as with all other countries, the US president has paused these rates, limiting tariffs to a flat 10 percent for now.

China has cited these tariff rates to project itself as a more reliable partner to Central Asia than the US. At the meeting with the foreign ministers of the region in April, Chinese Foreign Minister Wang Yi criticised unilateralism, trade protectionism, and “the trend of anti-globalisation [that] has severely impacted the free trade system”.

The US, Wang said, was “undermining the rule-based multilateral trading system, and destabilising the global economy”.

Why does Central Asia matter to China?

The region, rich in uranium, oil, and rare earth metals, has become increasingly important to China as a key corridor for trade with Europe. Subsequently, China has increased its engagement with Central Asian countries.

Xi, who has curtailed his foreign visits since the COVID-19 pandemic, is visiting Kazakhstan for the third time since 2020. He visited in 2022, and then again in 2024.

Central Asia is also a critical part of Xi’s Belt and Road Initiative (BRI) — a network of highways, railroads and ports connecting Asia, Africa, Europe and Latin America — as a gateway to Europe.

Experts expect the BRI to figure prominently at the summit in Astana on Tuesday, with additional emphasis on collaboration in energy and sustainable development.

A planned $8bn railway connecting China’s Xinjiang region to Uzbekistan through Kyrgyzstan is likely to be on the agenda, the SIIS’s Zhao said. Construction on the project is scheduled to begin in July. Expected to be completed by 2030, the railway route will provide China with more direct access to Central Asia and reduce the three countries’ reliance on Russia’s transport infrastructure.

Additionally, Zhao said, the summit may feature agreements on reducing tariffs, streamlining customs procedures, and lowering non-tariff barriers to boost bilateral trade volumes.

How much does Central Asia depend on China?

A lot.

China is today the top trading partner of each of the five Central Asian republics.

• Kazakhstan imported goods worth $18.7bn from China and exported goods worth $15bn in 2023 — making up 30 percent of its total imports and 16 percent of exports.
• Tajikistan imported goods worth $3.68bn from China and exported goods worth $250m in 2023 — making up 56 percent of its total imports and 16 percent of exports.
• Kyrgyzstan imported goods worth $3.68bn and exported goods worth $887m in 2023 from China — constituting 29 percent of its total imports and 26 percent of exports.
• Uzbekistan imported goods worth $12.7bn and exported goods worth $1.82bn in 2023 from the world’s second-largest economy — representing 32 percent of its total imports and 6 percent of exports.
• Turkmenistan imported goods worth $957m and exported goods worth $9.63bn in 2023 from China — or 20 percent of its total imports and 62 percent of exports.

China is also ramping up its investments in the region. It has committed to an estimated $26bn in investments in Kazakhstan, for instance.

Is China replacing Russia in Central Asia?

It’s complicated.

Formerly parts of the Soviet Union, the five Central Asian republics have long belonged in Russia’s strategic sphere of influence. Millions of people from the five republics live and work in Russia, and since 2023, Moscow has become a supplier of natural gas to Kazakhstan and Uzbekistan, which have faced energy shortages — even though Central Asia was historically a supplier of energy to Russia.

But though Russia remains a major economic force in the region, China has overtaken it as the largest trading partner of Central Asian republics over the past three years — a period that has coincided with Russia’s war on Ukraine. Some of that increased trade, in fact, is believed to be the outcome of China using Central Asia as a conduit for exports to Russia of goods that face Western sanctions.

Still, there are ways in which Russia remains the region’s preeminent outside ally. Kazakhstan, Kyrgyzstan and Tajikistan — three of the region’s five nations — are part of the Collective Security Treaty Organisation (CSTO) — along with Russia, Armenia and Belarus. Like NATO, this bloc offers collective security guarantees to members. In effect, Kazakhstan, Kyrgyzstan and Tajikistan have the cover of Russia’s protection if they are attacked by another nation — something that China does not offer.

As Israel and Iran exchange deadly salvoes for a fourth day, there are growing concerns that the conflict will spread across one of the world’s key oil- and gas-producing regions. Equity markets initially were roiled after Israel’s surprise attack on Friday but have since stabilised.

A day after Israel killed several of Iran’s top military commanders and nuclear scientists and damaged some of its nuclear sites, Israel then hit Iran’s fossil fuel sector on Saturday with Iranian state media reporting a blaze at the South Pars gasfield. More than 220 people have been killed in the Israeli attacks, including at least 70 women and children, according to Iranian authorities.

Iran responded with a barrage of ballistic missile and drone strikes, a small percentage of which succeeded in penetrating Israeli defences, killing at least 24 people.

On his Truth Social platform, United States President Donald Trump warned Tehran that the next “already planned attacks” would be “even more brutal”, adding: “Iran must make a deal [on its nuclear programme] before nothing is left.”

As the conflict between the Middle East’s two most powerful militaries spirals towards a full-fledged war, financial markets and the aviation sector are taking a hit. Analysts are watching oil prices, and investors are turning to safe havens like gold.

And a full-blown war could make things even worse – much worse, experts warned.

What has happened to the price of oil?

Brent crude, the global benchmark, rallied to $74.60 per barrel early on Monday.

That marked an almost 7 percent increase from Thursday, the day before Israel launched its surprise attack.

Much of the world’s oil and other key commodities such as natural gas pass through busy sea lanes in the Middle East, including the Strait of Hormuz.

The strait, a narrow waterway separating Iran from the Gulf states, links the Arabian Sea to the Indian Ocean.

It is a conduit for one-third of the world’s seaborne oil supplies, channelling roughly 21 million barrels every day.

At its narrowest point, it is 33km (21 miles) wide. Shipping lanes in the waterway are even narrower, making them vulnerable to attack.

The conflict between Israel and Iran has revived a decades-old question of whether Tehran will close the maritime chokepoint, triggering an oil price rally.

Quoting key conservative lawmaker Esmail Kosari, the Iranian news agency IRINN reported that Tehran is considering closing the strait as the conflict with Israel intensifies.

According to Goldman Sachs, a worst-case scenario involving blockades in the Strait of Hormuz could push oil prices above $100 per barrel.

Still, during the Iran-Iraq War from 1980 to 1988, in which both countries targeted commercial vessels in the Gulf, Hormuz was never completely closed.

What’s more, attempts to block the Strait of Hormuz would likely disrupt Tehran’s own exports, especially to China, cutting off valuable revenue.

According to Hamzeh Al Gaaod, an economic analyst at TS Lombard, a strategy and political research firm, “the repercussions to closing off the strait would be severe for Tehran itself.”

Have global inflation rates been affected?

When oil prices rise, the cost of production also goes up. This is eventually passed on to consumers, especially for energy-intensive goods like food, clothing and chemicals.

Oil-importing countries around the world could experience higher inflation and slower economic growth if the conflict persists.

Looking ahead, analysts warned that central banks would face reduced policy flexibility in trying to control rising prices.

“Central bankers from the G7 are currently on an [interest rate] cutting cycle, and so will be worried about a potential energy price shock,” Al Gaaod told Al Jazeera.

The Bank of England has recently slashed the United Kingdom’s base interest rate to 4.25 percent although the US Federal Reserve has held off on cutting rates in the wake of Trump’s tariffs, imposed on almost all countries since he returned to power in January.

How have markets responded?

Wall Street has taken a hit. On Friday, the S&P 500 and Nasdaq Composite indices shed 1.1 and 1.3 percent, respectively. In the Middle East, Egypt’s benchmark EGX 30 index fell 7.7 percent on Sunday while the Tel Aviv Stock Exchange 35 Index dropped 1.5 percent.

European equities also drifted down on the news of Israel’s attacks. Germany’s DAX and France’s CAC 40 fell a little more than 1.1 percent at the end of last week while the UK’s FTSE 100 ended 0.5 percent lower on Friday.

Still, some UK companies rallied. BAE Systems, a defence contractor, was up almost 3 percent on Friday, reflecting concerns that tensions could escalate.

In the US, share prices of military suppliers, including Lockheed, Northrop Grumman and RTX, also rose.

Elsewhere, oil companies BP and Shell gained in value with the former closing nearly 2 percent higher and the latter closing at just more than 1 percent higher.

The price of gold was also trading about 1 percent higher on Friday at $3,426 an ounce, close to the record high of $3,500 it hit in April.

On Monday, investors tempered some of their risk-off positioning with oil and gold prices falling and stock prices rising.

“It seems that markets are anticipating the conflict will remain relatively contained. Crucially, Iran has not attacked any US military assets in the region,” Al Gaaod said.

What has the impact been on the aviation sector with airspace closures?

Several airlines have suspended or cancelled flights in the Middle East, and some countries have shut their airspace.

Here is a list of some suspended and rerouted flights:

• Emirates, the Middle East’s largest airline, said it has suspended flights to and from Iraq, Jordan, Lebanon and Iran until June 30 with flights to Lebanon halted until Sunday.
• Etihad Airways has cancelled all flights between Abu Dhabi and Tel Aviv until Sunday. The airline is also rerouting several other services and has advised customers to await updates regarding their flight status.
• Qatar Airways has temporarily cancelled flights to Iran, Iraq and Syria due to ongoing tensions with passengers advised to check the status of their flights before travel.

Elsewhere, Iran’s official news agency IRNA reported that aviation authorities have shut down the country’s airspace until further notice.

On Friday, Iraq also closed its airspace and suspended all traffic at its airports, Iraqi state media reported. Eastern Iraq is home to one of the world’s busiest air corridors. Dozens of flights cross there at any one moment, flying between Europe and the Gulf – many on routes from Asia to Europe.

Jordan’s civil aviation authority said it had “temporarily” closed Jordanian airspace “in anticipation of any dangers resulting from the escalation happening in the region”.

For Al Gaaod, “there may be short-term disruption for Middle East tourism but only for a month or so. I suspect tourism will bounce back.”

He made a similar prediction about global financial markets: “So long as strikes remain contained, I think equity prices will continue to recover from last week.”

Iran’s official news agency IRNA says Iranian forces are carrying out a hybrid attack with drones accompanying the missiles targeting Israeli cities, with explosions heard in Israeli cities.

Israel’s Channel 13 cites “initial reports” late Saturday that Iranian missiles have hit the northern coastal city of Haifa and neighbouring town of Tamra. Videos posted to social media, and verified by Al Jazeera’s Sanad, showed Iranian cruise missiles in the skies of northern Israel.

The Israeli military, in the meantime, says it is now attacking military targets in Iran’s capital, Tehran.

Earlier on Saturday, Iran said that Israel intensified its military campaign against it for a second consecutive day, targeting key infrastructure and dealing another blow to the country’s struggling economy, as the conflict spirals towards a potential sustained all-out war.

Iranian officials confirmed that a blaze had erupted at the South Pars gas field – one of the country’s most vital energy sources – after it was struck by Israeli forces on Saturday.

Production from part of the field has been suspended, with state-affiliated media reporting that 12 million cubic metres (423 million cubic feet) of gas from Phase 14 have been temporarily halted. Though Iranian authorities later said the fire had been extinguished, the scale of the disruption remains unclear.

An Israeli official stated the strike was intended as a direct warning to Tehran. The message appears to be part of a broader strategy to cripple Iran’s economic and military capabilities, according to Fox News. The Israeli Broadcasting Authority cited an official as saying, “We attacked another Iranian gas field after Bushehr, and national infrastructure is on the list.”

Energy expert Manouchehr Takin told Al Jazeera that targeting South Pars – crucial for domestic consumption and commercial use – would deepen Iran’s internal energy crisis. “This is an attempt to paralyse Iran’s economy,” Takin said. “The domestic gas network was already under pressure due to sanctions and mismanagement.”

Al Jazeera’s Nour Odeh, reporting from Amman, said the move marked a shift in strategy. “Israel has previously targeted Iran’s military infrastructure, nuclear scientists and missile facilities. Now it’s going after civilian economic assets,” she said, warning that the economic impact could be severe if damage is extensive.

Iran reels from civilian toll and pledges retaliation

Tehran reported at least 80 people killed and more than 320 injured, including women and children, following Israeli strikes on both military and residential sites across the capital.

Among the dead are reportedly nine nuclear scientists. Iran hit back with a barrage of missiles that penetrated Israel’s high-tech missile defence system, with at least four deaths and more than 200 injuries recorded in Israel since Friday.

Iranian state media also claimed the downing of an Israeli F-35 fighter jet, one of the most advanced aircraft in Israel’s arsenal. While several Iranian news outlets have cited a military statement confirming the incident, there is no official footage or visual evidence, and Israeli officials have dismissed the reports as fabricated.

Reporting from Tehran, Al Jazeera’s Tohid Asadi noted growing public anger. “Many Iranians are frustrated that non-military targets were hit,” he said. “There had been hope weeks ago with talks on the table. Now, there’s only uncertainty and fear of escalation.”

The cancelled talks were originally set to take place in Oman on Sunday.

US President Donald Trump had tied the diplomatic effort to Iran’s agreement to roll back its nuclear programme. But Iranian Foreign Minister Abbas Araghchi said negotiations were off the table while “barbarous” Israeli attacks continued.

Meanwhile, the Israeli military claimed to have struck more than 150 Iranian targets and warned its operation could continue for weeks. Defence Minister Israel Katz issued a stark warning: “If Khamenei continues to fire missiles at the Israeli home front, Tehran will burn.”

Global leaders alarmed as fears of wider war grow

The prospect of full-scale regional war loomed large, as global leaders issued warnings.

Iran hinted at a potential closure of the Strait of Hormuz – a crucial oil shipping lane – should the conflict deepen. Tehran also warned that any foreign military bases aiding Israel could face retaliatory strikes.

Iran’s capacity for external retaliation, however, has weakened. After nearly two years of war in Gaza and last year’s conflict in Lebanon, its key regional allies – Hamas and Hezbollah – are significantly depleted, narrowing Iran’s military options.

Turkish President Recep Tayyip Erdogan spoke by phone with both Saudi Crown Prince Mohammed bin Salman and Iran’s President Masoud Pezeshkian. In both calls, Erdogan blamed Israeli Prime Minister Benjamin Netanyahu for fuelling the crisis.

According to a statement from Erdogan’s office, he told bin Salman that Israel poses the greatest threat to regional stability and urged an immediate halt to its actions. “The only way to resolve the nuclear dispute is through negotiations,” Erdogan said, warning of a potential refugee crisis if the situation spirals further.

The Turkish president also accused Israel of using attacks on Iran to distract from what he labelled a genocide in Gaza. “Netanyahu is trying to set the region on fire and sabotage diplomatic efforts,” Erdogan said, according to the statement.

As international concern mounts, US President Donald Trump and Russian President Vladimir Putin held a 50-minute call on Saturday.

While Trump praised Israel’s strikes and warned Iran of harsher consequences, Putin expressed grave concern and called for a halt to the military campaign. Both leaders, however, left the door open to a possible return to nuclear talks.

Chinese Foreign Minister Wang Yi spoke to his Iranian and Israeli counterparts and made clear Beijing’s support for Tehran.

Wang told Iranian Foreign Minister Abbas Araghchi that Beijing “supports Iran in safeguarding its national sovereignty, defending its legitimate rights and interests, and ensuring the safety of its people”, according to a statement by the foreign ministry.

The unfolding Israel-Iran conflict will “immensely” dominate the upcoming gathering of the leaders of the Group of Seven, not just because of the dangers of further escalation, but also because of the “sheer uncertainty” of United States policy under President Donald Trump, experts say.

The informal G7 grouping of the world’s seven advanced economies is set to meet from June 15 to 17 in Kananaskis, Alberta.

Holding the current presidency of the G7, Canada is hosting this year. While the agenda items will change in importance, depending on how things evolve in the Middle East, the latest crisis is already set to shift focus from what was expected to be a platform for host Canadian Prime Minister Mark Carney to showcase his leadership at home and to a global audience.

The G7 countries include Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, as well as the European Union. In addition, the host country typically invites the heads of a handful of other countries, usually because they are deemed important to global and economic affairs. Canada has invited India, Saudi Arabia, Ukraine along with a few others.

Carney is likely to have been hoping to avoid a repeat of the last time US President Donald Trump attended – also in Canada – in 2018. That was when he refused to sign the final communique – which G7 countries usually issue in a show of unity at the end of the summit – and left early, calling then-Canadian Prime Minister Justin Trudeau “very dishonest and weak”.

As a result of that spectacle, Carney was planning not to press for a joint communique at all this year – instead he was gearing up to write his own “chair’s summary” and seek agreement on a set of specific issues. Presenting an image of unity against a backdrop of looming, aggressive US trade tariffs, is the main aim.

But Robert Rogowsky, professor of trade and economic diplomacy at the Middlebury Institute of International Studies, said there is no way G7 members can avoid the subject of the latest crisis in the Middle East, which was triggered by a massive Israeli assault on military and nuclear sites in Iran on early Friday morning – and has since prompted retaliatory strikes by Iran. The US said it was not involved in the Israeli strike on Iran, but Trump told reporters on Friday that it was informed of the attack in advance.

“That attack, counterattack, and the US declaration that it was not involved and its warning about staying away from American assets as targets is likely to be the first thing discussed, as it now creates the possibility of a real, all-out war in the Middle East. The major neighbouring parties will have to decide how to align themselves,” Rogowsky said.

A ‘crisis response’ group?

The G7 “was designed to be a crisis response group with the ability to act and adapt quickly to international challenges … so in some ways, it’s good they’re meeting this weekend as they’ll have the ability to respond quickly”, said Julia Kulik, director of strategic initiatives for the G7 Research Group, among others, at Trinity College at the University of Toronto.

Even before this latest flare-up, the G7 in its 51st year comes “at a hinge moment because of economic disruptions and but also because of geopolitical shifts,” said Vina Nadjibulla, vice president and head of research at the Asia Pacific Foundation of Canada. Nadjibulla was referring to the global tariffs unleashed earlier this year by Trump as well as a shifting foreign policy for the US under his leadership, with old alliances no longer cared for, as well as an “America First” message.

Against that backdrop, “Prime Minister Carney has been trying to meet the moment and be as purposeful as possible,” Nadjibulla added, pointing to the list of priorities Canada announced last week ahead of the summit.

That list focuses on strengthening global peace and security, including by countering foreign interference and transnational crime, as well as improving responses to wildfires; spurring economic growth by improving energy security, and bringing in public-private partnerships to spur investments.

The priorities announced, important domestically but also internationally, are a “testament” to Carney’s intentions, and “building the economy is front and centre”, said Nadjibulla.

Conversations on global peace would have focused on the Russia-Ukraine conflict and Israel’s war on Gaza but attention will now pivot to Iran, said Kulik, “and there will be tough questions from other leaders around the table to Donald Trump about what went wrong with the negotiations and about what he’s going to do to get Israel to de-escalate before things get worse”.

Trump is a ‘coin flip’

Experts were already on the lookout for flare-ups at the upcoming three-day event with the mercurial Trump in attendance.

“His reactions are very emotional and performative, so it could be any of those and that could decide the dynamics of the G7,” said Rogowsky. “If he comes in wanting to build some bridges, then it could be a success, but if he wants to make a point, and this is another world wrestling federation for him, then [it can go anywhere]. With Trump, it’s a coin flip.”

But despite the Iran-Israel face-off, the G7 will still be an opportunity for Carney to set the tone at a complex time of tariff wars and slowing domestic and global economies. He is also aware that Canada has to “up its political game” and find new ways of boosting its economy and security. That is particularly visible in the invitation to Indian Prime Minister Narendra Modi, as Canada has had diplomatic tensions with India over the 2023 killing of a Sikh leader on Canadian soil in the recent past.

This shows that Carney is aware that to make progress on his agenda items, he will “need to work with countries that you may have disagreements with, but you can’t let those issues dictate the big picture,” said Nadjibulla. “Carney is setting the stage for a consequential meeting.”

Rogowsky added: “Carney is a globalist and wants to allow Canada to become a force in unity, in a multilateral system. I see him as taking on a role as a bridge builder. Maybe he’s the one guy who can pull this off.”

At the same time, he said, “it will be interesting to see how the other leaders approach Trump. Will it be a case of kowtow to the ruler, or he’s the bully on the playground and we’re going to stand up to him.”

For Rogowsky, the “cayenne pepper” in the meeting is the expected presence of Ukrainian President Volodymyr Zelenskyy, who was berated by Trump and US Vice President JD Vance in the White House on live television for not being “grateful” enough for US assistance.

The three-day event follows initial meetings in May between finance ministers and central bank governors belonging to G7 countries in Banff.

Israel’s strike on military and nuclear sites, and Iran’s retaliation, have rocked already strained global supply chains.

As airlines suspend flights to Tel Aviv, Tehran and other airports across the region, oil companies, shipping firms, and regulatory agencies are scrambling amid growing concerns that key trade routes like the Strait of Hormuz could be caught in the crossfire.

Merchant shipping is still passing through the Strait of Hormuz, but with increased caution. Iran has previously threatened to close this critical trade route in response to Western pressure. Even the suggestion of such a move has already sent shockwaves through global markets, and the price of oil has risen.

United States President Donald Trump’s latest rhetoric has done little to ease those concerns. He warned that if Iran does not “make a deal”, there could be more “death and destruction”.

“If the United States is perceived to be involved in any attacks, the risk of escalation increases significantly,” Jakob Larsen, chief safety and security officer with shipping association BIMCO, told the Reuters news agency.

Oil Prices Rise

As of 4:00pm in New York (20:00 GMT), Brent crude prices, which are considered the international standard, are 5 percent higher than yesterday’s market close.

Oil futures spiked more than 13 percent at one point, reaching their highest levels since January.

Any closure of the Strait of Hormuz, a strategic trade route between the Arabian Gulf and the Gulf of Oman, through which roughly 20 percent of the world’s global oil output travels, would likely drive oil prices even higher. This could intensify inflationary pressures globally, and particularly in the US.

The price surge comes on the heels of a better-than-expected Consumer Price Index report in the US earlier this week, which showed prices increased by just 0.1 percent for the month. Energy costs remain a key inflation driver. Petrol prices, in fact, fell 2.6 percent during the period. Consumer sentiment, too, jumped for the first time in six months as tariff fears eased. However, the new conflict could cut short the relief that US consumers had expressed, according to analysts from JPMorgan Chase.

Wait and see 

“Sustained gains in energy prices could have a dire impact on inflation, reversing the months-long trend of cooling consumer prices in the US,” commodity researchers for JPMorgan Chase said in a note released on the heels of the strike. “We continue to believe that any political policies that might drive oil and inflation higher would likely yield to Trump’s primary objective of maintaining low energy prices—a campaign promise,” analysts Natasha Kaneva, Prateek Kedia, and Lyuba Savinova wrote.

The markets more broadly dropped on the news. The S&P 500 tumbled 1.1 percent, the Dow Jones Industrial Average is down 1.7 and the Nasdaq is 1.3 percent lower.

“Today, as you can see from the markets, whether it’s the S&P, whether it’s Bitcoin, things have been kind of stable or flat. So there’s a little bit of a wait-and-see approach. Oil is acutely affected simply because Iran is such a significant part of the global oil supply. But thus far, Israel has refrained from hitting in any severe fashion the oil infrastructure of Iran. Should that change, that will obviously have a much more dramatic impact,” Taufiq Rahim, an independent geopolitical strategist and Principal for the 2040 Advisory, told Al Jazeera.

If shipping through the critical seaway were suspended, even temporarily, the International Energy Agency said it is well supplied to release emergency reserves, if needed. However, that comes with the risk of depletion.

There are 1.2 billion barrels in its strategic reserves. The world uses about 100 million barrels of oil per day.

“If it does rise to the level of closing the Strait of Hormuz, well, now that’s going to be the biggest oil shock of all time,” Matt Gertken, chief geopolitical strategist and senior vice president at BCA Research, a macroeconomic research firm, told Al Jazeera.

OPEC Secretary-General Haitham al-Ghais criticised the IEA for its statement that it could release strategic reserves, saying it “raises false alarms and projects a sense of market fear through repeating the unnecessary need to potentially use oil emergency stocks”.

This comes amid increased pressure for the group of oil-producing nations to increase output. Earlier this month, OPEC+ members agreed to raise production by 411,000 barrels for the month of July.

The Strait of Hormuz remains open for now. Countries, including Greece and the United Kingdom, have advised ships to avoid the Gulf of Aden, the body of water between Yemen and Somalia that connects to waterways that are close to Israel, and to log all voyages through the Strait, according to documents first seen by Reuters.

Further escalation on the horizon?

Iran could attack Iraq to reduce the global oil supply to further escalate tensions. In January 2024, Iran attacked Iraq, which it said was in retaliation for armed attacks within its own territory, The New York Times reported.

“We should assume that we’re going to lose both Iranian and Iraqi oil production, which brings us to the point where we could be seeing five to seven million barrels per day taken offline,” Gertken told Al Jazeera.

Gertken believes Iran would do this to provoke the West.

“They have to take out some oil supply, but not attack Saudi Arabia or close the Strait of Hormuz because, of course, that would ensure that the US enters the conflict. They need to target some regional production [where] they can have plausible deniability [and blame] some militant group.”

Boeing and GE Aerospace are scaling back their public activities following the fatal crash of an Air India jetliner, with the planemaker’s CEO cancelling his trip to the Paris Airshow next week and GE postponing an investor day.

More than 240 people were killed when an Air India Boeing 787 jet bound for London crashed moments after taking off from the city of Ahmedabad on Thursday, authorities said, in the world’s worst aviation disaster in a decade.

Boeing CEO Kelly Ortberg said in a message to staff on Thursday evening that he and Boeing Commercial Airplanes boss Stephanie Pope had cancelled plans to attend the Paris Airshow “so we can be with our team and focus on our customer and the investigation.”

The airshow, which runs from June 16 to June 20 at Le Bourget, is the global aviation industry’s largest trade show, where typically many aircraft orders are placed by airlines.

Ortberg had been due to attend for the first time as Boeing CEO since being appointed to lead the company out of a series of back-to-back safety, industrial and corporate crises.

Aircraft engine maker GE Aerospace, whose engines were in the Boeing 787 plane, had planned an investor day on June 17, coinciding with the show.

GE said the briefing had been cancelled and it would put a team together to go to India and analyse data from the crashed aeroplane.

“GE Aerospace’s senior leadership is focused on supporting our customers and the investigation,” the company said. It said it planned to give a financial update later this month.

Safety experts stressed it was too early to speculate why one of the world’s most modern airliners should crash shortly after takeoff. Accidents in that phase of flight are rare, said Paul Hayes, safety director at UK consultancy Cirium Ascend.

The Indian investigation of the crash is currently focusing on the engine, flaps and landing gear, Reuters reported on Friday, citing an unnamed source, as the country’s regulator ordered safety checks on Air India’s entire Boeing-787 fleet.

Under global aviation rules, India will lead the probe with support from NTSB investigators in the United States, who will, in turn, liaise with Boeing and GE on technical matters.

The reduced attendance plans came as delegates said the crash had cast a sombre mood over the airshow, putting in doubt several order announcements and putting safety back in the spotlight alongside concerns about US tariffs.

The world’s largest aviation trade expo, running from June 16 to 20 in Le Bourget, usually gives aircraft and arms manufacturers a key stage to showcase deals and sets the tone for a global supply chain already under pressure from shortages.

Boeing shares were down Friday, falling 3.8 percent, while GE Aerospace was down 2.4 percent.

Fewer deals

Boeing has cancelled some events and is unlikely to make any commercial order announcements at the show, though it will press ahead with low-key briefings on other topics, delegates said.

One key expected announcement had been a potential order for dozens of Boeing jets, including the 787 from Royal Air Maroc. But the airline plans no announcement at the show, and this will also affect Airbus, which had been expected to sell it some 20 A220s, industry sources said.

None of the companies had any comment on specific deals.

Airbus CEO Guillaume Faury on Friday expressed condolences over the accident, and the world’s largest planemaker was expected to observe a muted tone surrounding what had been expected to be a busy week for orders to meet high demand.

One delegate said business would continue but with fewer of the high-profile news conferences and in-person announcements associated with the industry’s biggest commercial showcase.

Another said some order announcements could be delayed until later in the year as a mark of respect for victims.

“The show will be a lot more sombre, less celebratory,” said a delegate involved in planning one such announcement, speaking anonymously because the plans have not been publicly revealed.

“The show will go ahead as planned, but it will be more subdued and with less cheerleading,” the delegate said.

United States President Donald Trump has signed a series of congressional resolutions to roll back standards in California that would have phased out petrol-powered cars and promoted the use of electric vehicles (EVs).

But Thursday’s signing ceremony gave Trump a platform to strike blows against several of his political foes, including the Democratic leadership of California and ally-turned-critic Elon Musk.

Musk famously leads the electric vehicle company Tesla. California, meanwhile, has long been a Democratic stronghold, and since taking office for a second term in January, Trump has continuously sparred with its governor, Gavin Newsom.

Thursday’s resolutions gave Trump a chance to skewer one of Newsom’s signature environmental achievements: a state mandate that would have gradually required new cars in California to produce zero greenhouse gas emissions.

That goal was meant to unfold in stages. By 2026, 35 percent of all new cars sold would be emission-free vehicles. By 2030, that number would rise to 68 percent. And by 2035, California would reach 100 percent.

But Trump argued that California’s standards would hamper the US car industry and limit consumer choice. Already, 17 other states have adopted some form of California’s regulations.

“Under the previous administration, the federal government gave left-wing radicals in California dictatorial powers to control the future of the entire car industry all over the country — all over the world, actually,” Trump said on Thursday.

“ This horrible scheme would effectively abolish the internal combustion engine, which most people prefer.”

But critics point out that many carmakers did not necessarily oppose California’s mandate: Rather, automobile companies like General Motors had already put in place plans to transition to electric-vehicle manufacturing, to keep up with global trends.

Already, California and 11 other states have announced they will sue to keep the electric vehicle mandate in place. Here are three takeaways from Thursday’s signing ceremony.

A continuing feud with California

The decision to roll back California’s electric-vehicle standards was only the latest chapter in Trump’s long-running beef with the state.

Just last week, protests broke out in the Los Angeles area against Trump’s push for mass deportation, as immigration raids struck local hardware stores and other workplaces.

Trump responded by deploying nearly 4,000 National Guard members and 700 Marines to southern California, in the name of tamping down protest-related violence.

Though Thursday’s ceremony was ostensibly about the electric-vehicle mandate, Trump took jabs at the state’s management of the protests, blaming Governor Newsom for allowing the situation to spiral out of control.

“If we didn’t go, Los Angeles right now would be on fire. It would be a disaster. And we stopped it,” Trump said, accusing Newsom of having “a faulty thought process” and trying to protect criminals.

Trump also drew a parallel to the wildfires that ravaged the Los Angeles area in January, whose flames were whipped and spread by dangerous wind conditions that kept aerial support out of the skies.

“Los Angeles would be right now burning to the ground just like the houses burned to the ground,” Trump said, referencing the wildfires. “It’s so sad, what’s going on in Los Angeles.”

California’s electric-vehicle mandate, he argued, would have likewise spurred another emergency.

“Today, we’re saving California, and we’re saving our entire country from a disaster. Your cars are gonna be thousands of dollars less,” Trump said.

“Energy prices would likewise soar as the radical left forced more electric vehicles onto the grid while blocking approvals for new power plants,” he continued. “ The result would be rolling blackouts and a collapse of our power systems.”

Earlier this week, Newsom and California Attorney General Rob Bonta dismissed Trump’s concerns as little more than an attack on state rights.

“Trump’s all-out assault on California continues — and this time he’s destroying our clean air and America’s global competitiveness in the process,” Newsom said in a statement. “We are suing to stop this latest illegal action by a President who is a wholly-owned subsidiary of big polluters.”

Newsom has also denounced the deployment of troops to Los Angeles as an “unmistakable step toward authoritarianism” and has sued to limit that action as well.

Trump weighs in on Elon Musk

As Trump continued to outline his reasoning for peeling back the EV mandates, his speech briefly veered into another area of conflict: his recently rocky relationship with Musk.

A billionaire, Musk leads several high-profile companies with government contracts, including the rocket manufacturer SpaceX and the satellite communication firm Starlink. And then, of course, there is Musk’s car company Tesla, which produces electric vehicles.

Musk was one of the largest donors in the 2024 elections, spending north of $280m to back Trump and other Republicans. Trump, for his part, featured Musk on the campaign trail and named him the leader of the newly created Department of Government Efficiency (DOGE) shortly after his election.

In January, Musk joined the Trump administration as a “special government employee”, an advisory role with a time limit of about 130 days per year.

As he reached the end of that term, Musk became increasingly outspoken about Trump’s signature budget legislation, the One Big Beautiful Bill. While the bill would have cemented Trump’s 2017 tax cuts and funnelled more money into immigration enforcement, it would have also increased the national debt by trillions of dollars.

Musk also objected to the “pork” — the extra spending and legislative provisions — that were packed into the lengthy, thousand-page bill. The billionaire took to social media to call the bill a “disgusting abomination“, as the two men entered into an increasingly heated exchange of words.

Trump called Musk “crazy”, and Musk suggested Trump should be impeached. The billionaire has since said he “regrets” some of his remarks.

On Thursday, Trump repeated his assertion that Musk’s outburst was the result of his policies towards electric vehicles, something Musk has denied. Early in his second term, Trump pulled the plug on a goal set under former President Biden to have 50 percent of all new vehicles sold be electric by 2030.

“On my first day in office, I ended the green new scam and abolished the EV mandate at the federal level,” Trump said on Thursday. “Now, I know why Elon doesn’t like me so much. Which he does, actually. He does.”

He continued to muse on their unravelling relationship, saying that Musk “never had a problem” with his electric vehicle policies.

“I used to say, ‘I’m amazed that he’s endorsing me,’ because that can’t be good for him,” Trump said.

“He makes electric cars, and we’re saying, ‘You’re not going to be able to make electric cars, or you’re not gonna be forced to make all of those cars. You can make them, but it’ll be by the market, judged by the market.’”

Trump added that he feels Musk “got a bit strange” but that he still likes the car company Tesla — and “others too”.

An increase in auto tariffs ahead?

Amid the talk about his feuds with Musk and California, Trump also dropped a possible bombshell: More automobile tariffs may be on the way.

Already, Trump has relied heavily on tariffs — taxes on imported products — to settle scores with foreign trading partners and push for greater foreign investment in domestic industries, including car manufacturing.

“If they want a Mercedes-Benz, you’re going to have it made here. It’s OK to have a Mercedes, but they’re going to make it here,” he said on Thursday. “Otherwise, they’re going to pay a very big tariff.  They already are.”

Currently, automobiles imported to the US from abroad are subject to a 25-percent tax, a cost that critics say is passed along to the consumer.

But Trump warned on Thursday that he is prepared to go higher, as he has done with taxes on steel and aluminium.

“ To further defend our auto workers, I imposed a 25-percent tariff on all foreign automobiles. Investment in American auto manufacturing is surging because of it,” Trump said.

“Auto manufacturing — all manufacturing — is surging. I might go up with that tariff in the not-too-distant future. The higher you go, the more likely it is they build a plant here.”

Trump pointed to his negotiations over steel imports as a success story.

“American Steel is doing great now because of what we did. If I didn’t put tariffs on steel, China and a lot of other countries were dumping steel in our country,” he said. “Garbage steel, dirty steel, bad steel, not structurally sound steel. Real garbage.”

But by raising tariffs from 25 to 50 percent earlier this month, Trump said he protected the US steel industry. He also shared details about a deal that would see the Japanese company Nippon invest in the company US Steel.

“We have a golden stock. We have a golden share, which I control — or the president — controls. Now, I’m a little concerned whoever the president might be, but that gives you total control,” Trump said. “It’s 51-percent ownership by Americans.”

US industry leaders had been concerned that the deal with Nippon would see further erosion of the US manufacturing industry, which suffered from decades of foreign competition. The deal with Nippon has been previously described as a takeover, prompting concerns about the future and independence of the US steel industry.

The fatal crash of a 787 Dreamliner that was being operated by Air India from Ahmedabad in northwestern India to London Gatwick Airport has once again fueled scrutiny of both Boeing and the airline, as the two companies have been trying to emerge from years of crises and poor reputations.

The nearly 12-year-old Dreamliner crashed on a densely populated part of the city soon after takeoff, killing 241 of the 242 people on board on Thursday. The total death toll is expected to rise as the plane fell on a medical college hostel and rescue operations are still under way.

The crash raises new concerns for Boeing, which continues to face mounting safety issues that have undermined public trust in its aircraft. These challenges come as the Seattle-based aerospace giant grapples with economic pressures from tariffs imposed by United States President Donald Trump, as well as increased regulatory attention that followed its recent safety issues.

The reason behind the crash is not yet clear.

But it is yet another fatal accident involving a Boeing aircraft, adding to a string of public relations crises that have made many travellers wary of flying on its planes.

“Boeing has become notorious and infamous with flyers at this moment, regardless of the model of the plane. Even the word ‘Boeing’ triggers a lot of people,” Adnan Bashir, an independent global communications and corporate affairs consultant who specialises in crisis communications, told Al Jazeera.

The company’s safety reputation began to unravel in October 2018 when a Lion Air flight operating a 737 MAX crashed due to a malfunction in the Maneuvering Characteristics Augmentation System (MCAS), a programme designed to prevent stalls. That crash killed all 189 people on board.

Just months later, in March 2019, an Ethiopian Airlines flight using the same aircraft model crashed for the same reason, killing all 157 people aboard.

Turmoil resurfaced in January 2024, when a door panel detached mid-flight on an Alaska Airlines route between Ontario, California, and Portland, Oregon.

But until now, the 787 Dreamliner aircraft had maintained a relatively strong safety record.

“This is the first fatal crash of the 787, so despite all of its problems in the early days and all the production issues that Boeing had with the aeroplane, this has had a perfect safety record up to this point,” aviation expert Scott Hamilton told Al Jazeera.

First launched in 2011, Boeing has sold more than 2,500 of the model globally. Air India bought 47 of them, and to date, Boeing has delivered 1,189 Dreamliners.

The model has faced years of safety-related scrutiny. In 2024, John Barnett, a former Boeing quality manager, was found dead under suspicious circumstances after long voicing concerns about the 787. Barnett had alleged that Boeing cut corners to meet production deadlines, including installing inadequate parts. He also claimed that testing revealed a 25-percent failure rate in the aircraft’s emergency oxygen systems.

In 2019, The New York Times published an expose that revealed Boeing had pressured workers not to report safety violations, citing internal emails, documents, and employee interviews.

More recently, another whistleblower, Sam Salehpour, told lawmakers he was threatened for raising safety concerns about Boeing aircraft.

Today’s crash is the latest fatal incident to occur under the leadership of Boeing CEO Kelly Ortberg, who returned from retirement in 2024 to replace Dave Calhoun. Ortberg had pledged to restore the company’s safety reputation.

Previously, the last fatal Boeing incident occurred in December, when a Jeju Airlines flight crashed after a bird strike, killing 179 of the 181 people on board.

Earlier this month, the US Department of Justice reached a settlement with Boeing that allowed the company to avoid prosecution for previous crashes. The deal required Boeing to pay $1.1bn, including investments to improve safety standards and compensation to victims’ families.

On Wall Street, Boeing’s stock dropped nearly 5 percent from the previous day’s market close.

At this point, experts believe that ultimately, Boeing executives will be careful with their words because of the looming legal challenges they may face if an investigation finds the fault lies with the plane-maker.

“You can almost guarantee there’s going to be lawsuits of some sort. Right now, they’re likely triaging internal and external communication plans with their legal team. Because anything they say in public right now could be used as evidence. And so what they’re going to be doing right now is staying quiet, most likely until more facts come out,” Amanda Orr, founder of the legal and policy communications consultancy firm Orr Strategy Group, told Al Jazeera.

In response to today’s crash, Boeing said, “We are in contact with Air India regarding Flight 171 and stand ready to support them … Our thoughts are with the passengers, crew, first responders and all affected.” Boeing did not respond to Al Jazeera’s request for comment.

Air India turnaround setback

For Air India, which has been undergoing a major reinvention in the last few years, today’s crash is a major setback in its efforts to rebrand and modernise.

Founded in 1932, the airline was nationalised in 1953. After years of financial struggles and mounting debt, Tata Group acquired the airline for $2.2bn in 2022.

As India’s only long-haul international carrier to Europe and North America, Air India has a strong hold on global travel from across the country. In 2023, the carrier ordered 220 Boeing aircraft, including 20 Dreamliners, 10 777x jets, and 190 of the embattled 737 MAX.

For now, Air India is focused on its response to the crash.

“At this moment, our primary focus is on supporting all the affected people and their families. We are doing everything in our power to assist the emergency response teams at the site and to provide all necessary support and care to those impacted,” said N Chandrasekaran, chairperson of Tata Sons, the holding company of Tata Group, in a statement provided to Al Jazeera.

“I express our deep sorrow about this incident. This is a difficult day for all of us at Air India. Our efforts now are focused entirely on the needs of our passengers, crew members, their families and loved ones,” Craig Wilson, the airline’s CEO, said in a video statement.

The airline has experienced a few fatal accidents in recent years. In 2020, an Air India Express flight skidded off the runway in Kozhikode in India, killing 20. A similar accident in Mangalore involving a 737-800 claimed 156 lives.

Despite the shock of today’s crash, flying remains one of the safest modes of travel. According to a 2024 study by the Massachusetts Institute of Technology, the risk of dying in a commercial airline accident is one in every 13.7 million passengers. This continues to be the safest decade in aviation history.

China’s export of rare earth elements is central to the trade deal struck this week with the United States.

Beijing has a virtual monopoly on the supply of the critical minerals, which are used to make everything from cars to drones and wind turbines.

Earlier this year, Beijing leveraged its dominance of the sector to hit back at US President Donald Trump’s sweeping tariffs, placing export controls on seven rare earths and related products.

The restrictions created a headache for global manufacturers, particularly automakers, who rely on the materials.

After talks in Geneva in May, the US and China announced a 90-day pause on their escalating tit-for-tat tariffs, during which time US levies would be reduced from 145 percent to 30 percent and Chinese duties from 125 percent to 10 percent.

The truce had appeared to be in jeopardy in recent weeks after Washington accused Beijing of not moving fast enough to ease its restrictions on rare earths exports.

After two days of marathon talks in London, the two sides on Wednesday announced a “framework” to get trade back on track.

Trump said the deal would see rare earth minerals “supplied, up front,” though many details of the agreement are still unclear.

What are rare earths, and why are they important?

Rare earths are a group of 17 elements that are essential to numerous manufacturing industries.

The auto industry has become particularly reliant on rare-earth magnets for steering systems, engines, brakes and many other parts.

China has long dominated the mining and processing of rare earth minerals, as well as the production of related components like rare earth magnets.

It mines about 70 percent of the world’s rare earths and processes approximately 90 percent of the supply. China also maintains near-total control over the supply of heavy rare earths, including dysprosium and terbium.

China’s hold over the industry had been a concern for the US and other countries for some time, but their alarm grew after Beijing imposed export controls in April.

The restrictions affected supplies of samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, and required companies shipping materials and finished products overseas to obtain export licences.

The restrictions followed a similar move by China in February, when it placed export controls on tungsten, bismuth and three other “niche metals”.

While news of a deal on rare earths signals a potential reprieve for manufacturers, the details of its implementation remain largely unclear.

What has been the impact of the export restrictions?

Chinese customs data shows the sale of rare earths to the US dropped 37 percent in April, while the sale of rare earth magnets fell 58 percent for the US and 51 percent worldwide, according to Bloomberg.

Global rare earth exports recovered 23 percent in May, following talks between US and Chinese officials in Geneva, but they are still down overall from a year earlier.

The greatest alarm has been felt by carmakers and auto parts manufacturers in the US and Europe, who reported bottlenecks after working their way through inventories of rare earth magnets.

“The automobile industry is now using words like panic. This isn’t something that the auto industry is just talking about and trying to make a big stir. This is serious right now, and they’re talking about shutting down production lines,” Mark Smith, a mining and mineral processing expert and the CEO of the US-based NioCorp Developments, told Al Jazeera.

Even with news of a breakthrough, Western companies are still worried about their future access to rare earths and magnets and how their dependence on China’s supply chain could be leveraged against them.

The Financial Times reported on Thursday that China’s Ministry of Commerce has been demanding “sensitive business information to secure rare earths and magnets” from Western companies in China, including production details and customer lists.

What have the US and China said about rare earth exports?

Trump shared some details of the agreement on his social media platform, Truth Social, where he also addressed concerns about rare earths and rare earth magnets.

“We are getting a total of 55% tariffs, China is getting 10%. The relationship is excellent,” Trump said, using a figure for US duties that includes levies introduced during his first term.

“Full magnets, and any necessary rare earths, will be supplied, up front, by China. Likewise, we will provide to China what was agreed to, including Chinese students using our colleges and universities (which has always been good with me),” Trump said.

Ahead of the negotiations in London, China’s Ministry of Commerce had said it approved an unspecified number of export licences for rare earths, and it was willing to “further strengthen communication and dialogue on export controls with relevant countries”.

However, an op-ed published by state news outlet Xinhua this week said rare earth export controls were not “short-term bargaining tools” or “tactical countermeasures” but a necessary measure because rare earths can be used for both civilian and military purposes.

NioCorp Developments’ Smith said Beijing is unlikely to quickly give up such powerful leverage over the US entirely.

“There’s going to be a whole bunch of words, but I really think China is going to hold the US hostage on this issue, because why not?” he said.

“They’ve worked really hard to get into the position that they’re in. They have 100 percent control over the heavy rare earth production in the world. Why not use that?”

Deborah Elms, the head of trade policy at the Hinrich Foundation in Singapore, said it was hard to predict how rare earths would be treated in negotiations, which would need to balance other US concerns like China’s role in exporting the deadly opioid fentanyl to the US.

Beijing, for its part, will want guarantees that it can access advanced critical US technology to make advanced semiconductors, she said.

US president unveils site for applicants to register interest for ‘Trump Card’ granting path to citizenship.

United States President Donald Trump has said his administration is accepting applications for his so-called “Trump Card”, which promises applicants permanent residency for $5m.

Trump made the announcement on Wednesday as he unveiled a new website for prospective applicants to register their interest.

Visitors to TrumpCard.gov are encouraged to submit their name, region and email address, and specify whether they are applying as an individual or a business, in order “to be notified the moment access opens”.

“Thousands have been calling and asking how they can sign up to ride a beautiful road in gaining access to the Greatest Country and Market anywhere in the World,” Trump said in a post on Truth Social.

“It’s called THE UNITED STATES OF AMERICA. THE WAITING LIST IS NOW OPEN.”

Trump first proposed the residency visa in February, saying his administration would offer wealthy applicants a “gold card” that grants residency and work rights as well as a path to citizenship.

“They’ll be wealthy, and they’ll be successful, and they’ll be spending a lot of money, and paying a lot of taxes and employing a lot of people,” Trump said at the time.

In April, Trump displayed a sample visa – a gold-coloured card bearing his visage – to reporters on board Air Force One.

Trump administration officials have suggested that the card will replace the EB-5 immigrant investor visa programme, which grants permanent residency to immigrants who invest at least $1.05m in the US, or $800,000 in designated economically distressed areas.

It is unclear what criteria applicants may have to meet apart from the $5m price tag, though the Trump administration has indicated there will be a vetting process.

Under current immigration rules, lawful permanent residents can apply for naturalisation after five years provided they have a basic grasp of English, and they can demonstrate they are of “good moral character” and have an “attachment to the principles and ideals of the US Constitution.”

THE UK economy shrunk in April and by more than expected, official figures show.

The Office for National Statistics (ONS) said Gross Domestic Product (GDP) went down by 0.3% that month.

Services and manufacturing both contributed to the fall.

However GDP still grew over the last three months as a whole, with signs that some activity may have been brought forward from April to earlier in the year.

The figures likely reflect the impact of huge tariffs imposed by US President Donald Trump.

Experts had warned the tariffs could put a dampener on UK sectors including car and steel manufacturers.

It comes after the economy grew by 0.7% in the quarter to March.

At the time, it had grown more than expected.

Shadow business secretary Andrew Griffith said: “It’s bad news that growth has fallen but when you introduce a £25billion jobs tax, hike business rates, drive investors overseas and spawn hundreds of pages of extra red tape, lower growth is precisely what you get.

“You can’t tax and spend your way to growth.”

A new report accuses fashion giants of not considering the welfare of workers affected by climate change in garment factories in Southeast Asia.

Fashion brands including luxury label Hermes, sportswear giant Nike, and fast fashion chain H&M are in the hot seat amid new allegations of climate greenwashing after making commitments to slash carbon emissions in Asia, which is home to more than 50 percent of global garment production.

A report released this morning by the Business & Human Rights Resource Centre (BHRRC), titled, The Missing Thread, analysed 65 global fashion brands. It found that while 44 of them had made public commitments to reduce carbon emissions, none had adopted what is known as a “Just Transition” policy, a concept first introduced during COP27 in Egypt in 2022.

A Just Transition ensures that workers are not left behind as industries shift towards a low-carbon economy.

Only 11 companies in the study acknowledged the climate-related impact on workers in their social and human rights policies. Just four provided any guidance on managing heat-related stress.

Only two companies among those deemed the most ambitious by the report mentioned the welfare of workers. These included Inditex, the Spanish retail giant that owns the fast fashion company Zara, and Kering, the parent company of Gucci.

“Decarbonisation done without workers as critical and creative partners is not a just transition, it’s a dangerous shortcut,” said Natalie Swan, labour rights programme manager at BHRRC, in a news release.

Currently, the global textile industry relies on 98 million tonnes of non-renewable resources per year, such as oil and fertiliser. At current trends, the fashion industry is on track to be responsible for more than 25 percent of global greenhouse gas emissions by 2050.

“The fashion industry’s climate targets mean little if the people who make its products are not taken into consideration,” Swan said. “It’s not enough to go green. It has to be clean and fair.”

“Brands must stop hiding behind greenwashing slogans and start seriously engaging workers and their trade unions, whose rights, livelihoods and safety are under threat from both climate change and the industry’s response to it. A just transition is not just a responsibility, it’s a critical opportunity to build a fairer, more resilient fashion industry that works for people and the planet.”

Al Jazeera reached out to Nike, Hermes, H&M, Inditex and Kering. None of them responded to a request for comment.

Extreme weather

The effects of climate change have already hit much of Southeast Asia hard. Garment workers in countries including Bangladesh, Cambodia, Indonesia, and Vietnam have experienced extreme weather events such as surging temperatures and severe flooding.

In Bangladesh, workers reported fainting from heat-related illnesses. According to the report, factories allegedly failed to provide fans or drinking water. Similar challenges were noted in Cambodia, where temperatures regularly exceeded 39 degrees Celsius (102 degrees Fahrenheit) during a 2022 heatwave.

A third of workers said they had already lost work due to automation. In Bangladesh’s garment sector, 30 percent reported job losses stemming from technological changes. These shifts have disproportionately affected female workers, who are less likely to receive training on new technologies and are often excluded from on-the-job learning opportunities that could help them adapt to evolving industry demands.

The United States and China say they’ve reached in principle a framework to roll back some of the punitive measures they have taken against each other’s economies.

That means Washington could ease restrictions on selling chips to China if Beijing agrees to speed up the export of rare earths.

Whether that happens depends on the approval of presidents Donald Trump and Xi Jinping.

The plan reached after talks in London marks the latest twist in a trade war that has threatened to disrupt global supply chains.

Also, what’s behind the surge in Russia’s rouble?

Plus, are nations choosing warfare over welfare?

With the FIFA Club World Cup 2025 about to get under way on Saturday, the football league in the host nation United States (US) finds itself at odds with players from its three participating clubs over monetary compensation from the tournament.

Three Major League Soccer (MLS) clubs – Inter Miami, Seattle Sounders and Los Angeles FC – are among the 32 teams that have qualified for the tournament running from June 14 to July 13 across 11 venues in the US.

Players from the three clubs, represented by the MLS Players Association (MLSA), have protested over the amount of compensation they are promised from the tournament by the MLS.

Here’s a breakdown of the ongoing tussle between the MLS and its players:

What’s the Club World Cup pay dispute between the MLS and its players?

The players are demanding an increased share of the tournament prize money in addition to the participation fee they are set to receive.

The players’ association has accused the MLS of refusing to engage in a negotiation so far, while the league has said it has offered the clubs an “enhanced structure” for the players.

How have the players registered their protest?

On June 1, players of Seattle Sounders FC brought attention to the issue by wearing shirts that read “Club World Cup Ca$h Grab” during their warm-up session before their match against Minnesota United FC.

A number of players from the three clubs also posted on social media with the hashtag #FairShareNow, causing fans to take notice and engage in social media conversations.

#FairShareNow pic.twitter.com/EW7ABFbsPX

— Stefan Frei (@Stefan24Frei) June 8, 2025

How much money will MLS clubs receive at the Club World Cup?

Every MLS team will earn a participation fee of $9.55m, but can win additional prize money based on its performance.

Each win or draw during the tournament will also bring in additional prize money, which can increase further should the club advance to the next stages. Since LAFC beat Club America to qualify for the tournament in a playoff game, they won an additional $250,000 in prize money.

What part of the prize money will go to the players?

According to the existing collective bargaining agreement (CBA) between the MLS and MLSPA, the players are eligible to receive 50 percent of the prize money in undefined tournaments such as the Club World Cup.

The MLS, on Sunday, said it has proposed an enhanced structure for the Club World Cup “to reward both participation and competitive achievement in the tournament.”

According to the MLS, this is what’s on offer in the revised proposal: “In addition to the guaranteed $1m per team for qualifying, 20 percent of all prize money earned from the group stage onward would be allocated to players. If an MLS club wins the Club World Cup, its players could collectively receive more than $24m in performance bonuses.”

What do the MLS players want?

They seek a better deal than the one put forward by the MLS in its latest proposal, and for the league to engage with its players in a negotiation.

The players’ association says the latest proposal offered by MLS does not include any additional participation bonuses for the players and offered “below-standard” back-end compensation.

The MLSPA has also accused the league of asking for unrelated concessions to the CBA.

As things stand, the CBA includes a provision that caps the amount of prize money that can go to players at $1m. The MLSPA believes the players are entitled to a bigger share of the funds.

“The timing, substance and retaliatory nature of the proposal sends a clear message: MLS does not respect or value players’ efforts with regard to this tournament,” the MLSPA said in a statement on Sunday.

It further added that the proposed 20 percent share of the compensation amount is “below international standard”.

“Although not surprised, the players and the MLSPA are deeply disappointed by this message,” the MLSPA said.

An update on Club World Cup Bonuses.

MLS spent most of last week making threats and promising retaliation against the MLSPA and players because Seattle players wore t-shirts that expressed frustration over the league’s refusal to engage about Club World Cup compensation.

More… pic.twitter.com/jAz06ASGYw

— MLSPA (@MLSPA) June 8, 2025

How has the MLS responded to the players’ demands?

Neither side has issued any further statements, but players have continued posting on social media with the #FairShareNow hashtag.

Reports in US media said the talks between the two sides were ongoing.

The league’s last statement said that MLS owners believe that performance-based incentives are appropriate given the expanded format and increased prize pool for the tournament.

“The League values the continued dedication and commitment of its players and looks forward to supporting them as they represent their clubs – and Major League Soccer – on the global stage this summer,” it added.

What happens if the players and MLS don’t reach an agreement?

Should both sides remain at loggerheads, it is unlikely that the players will refuse to take the field for their games in a tournament hosted in their clubs’ home country.

If they do, the players risk being fined and reprimanded by the league in accordance with its rules.

How does the MLS pay dispute impact the FIFA Club World Cup?

It is unlikely to impact the tournament directly unless the players refuse to take the field for their clubs.

However, the controversy has added what would be considered unwelcome attention to the MLS’s pay structure and the Club World Cup, a tournament that has already faced plenty of criticism from football players and officials.

Why aren’t players from other leagues protesting?

It remains unclear how other leagues and teams are compensating their players for their participation in the Club World Cup.

The breakdown and distribution of the prize money and participation fee vary across leagues.

Negotiators say agreement will be presented to US President Donald Trump and Chinese President Xi Jinping for approval.

The United States and China have agreed on a “framework” on trade after two days of talks in London aimed at deescalating tensions between the sides.

While the specifics of the framework announced on Tuesday were unclear, the apparent breakthrough comes a month after Washington and Beijing announced a 90-day pause on most of their tariffs following talks in Geneva.

US Commerce Secretary Howard Lutnick said the sides would work to implement the “Geneva consensus” and had “pounded through” all the issues dividing the world’s two largest economies.

Lutnick said the sides would move forward with the framework pending its approval by US President Donald Trump and Chinese President Xi Jinping, who held a 90-minute phone call on trade last week.

“Once the presidents approve it, we will then seek to implement it,” Lutnick told reporters outside Lancaster House.

Lutnick indicated that US measures imposed in response to a slowdown in Chinese exports of rare earths, a key issue dividing the sides, would likely be eased once supplies of the critical minerals ticked up.

Chinese Vice Commerce Minister Li Chenggang called the talks “professional, rational, in-depth and candid”.

“The two sides will bring back and report to our respective leaders the talks in the meeting as well as the framework that was reached in principle,” Li told reporters.

“We hope that the progress we made in this London meeting is conducive to increasing trust between China and the United States.”

Asian stock markets rose on hopes of a de-escalation in the trade tensions, which have cast a shadow over the global economy.

The World Bank on Tuesday lowered its forecast for global growth from 2.7 percent to 2.3 percent, pointing to the ongoing uncertainty around trade.

Japan’s Nikkei 225 was up almost 0.5 percent as of 03:30 GMT, while the Hang Seng in Hong Kong and CSI 300 in mainland China were about 1 percent and 0.8 higher, respectively.

“I would say that meeting a 90-day deadline for complex discussions was always going to be challenging,” Deborah Elms, the head of trade policy at the Hinrich Foundation in Singapore, told Al Jazeera.

“After two rounds of apparently intense discussions, both sides seem to have reaffirmed their interest in avoiding new escalation and have started to flesh out the path forward. Despite the optimistic language from some out of the White House, these talks are not going to be easy.”

Acting Enforcement Director Cara Petersen has served with the United States agency since it was founded.

The top remaining enforcement official at the United States Consumer Financial Protection Bureau (CFPB) has tendered her resignation, saying the White House’s overhaul of the agency has made her position untenable.

Acting Enforcement Director Cara Petersen, who has served at the agency since its creation nearly 15 years ago, said that current leadership under US President Donald Trump “has no intention to enforce the law in any meaningful way”, according to an email first obtained by the Reuters news agency.

“I have served under every director and acting director in the bureau’s history and never before have I seen the ability to perform our core mission so under attack,” Petersen wrote in an email.

“It has been devastating to see the bureau’s enforcement function being dismantled through thoughtless reductions in staff, inexplicable dismissals of cases, and terminations of negotiated settlements that let wrongdoers off the hook.”

Petersen’s departure comes four months after the agency’s enforcement and supervision chiefs also resigned amid efforts by President Donald Trump to dismantle the CFPB.

An agency spokesperson and Petersen did not immediately respond to requests for comment. In addition to seeking to cut the CFPB’s workforce by about 90 percent, acting Director Russell Vought and chief legal officer Mark Paoletta have said they will slash agency enforcement and supervision and have dropped major CFPB enforcement cases en masse, including against Capital One and Walmart. The agency has even revised some cases already settled under the prior administration.

The dramatic changes come as Republicans have complained for years that the CFPB, created in the aftermath of the 2007-2009 global financial crisis, is too powerful and lacks oversight. Democrats and agency backers contend it plays a critical role in policing financial markets on behalf of consumers.

“While I wish you all the best, I worry for American consumers,” said Petersen in her email. A federal appeals court in Washington has yet to decide on the Trump administration’s effort to undo a court injunction blocking the agency from firing most agency staff.

Bangkok, Thailand – A brief text message informed Chonlada Siangkong that she had lost her job at a solar cell factory in Rayong, eastern Thailand.

The factory operated by Standard Energy Co, a subsidiary of Singaporean solar cell giant GSTAR, shut its doors last month in anticipation of United States President Donald Trump’s tariffs on solar panel exports from Southeast Asia.

From Monday, US Customs and Border Protection will begin imposing tariffs ranging from 375 percent to more than 3,500 percent on imports from Thailand, Cambodia, Vietnam and Malaysia.

The punishing duties, introduced in response to alleged unfair trade practices by Chinese-owned factories in the region, have raised questions about the continuing viability of Southeast Asia’s solar export trade, the source of about 80 percent of solar products sold in the US.

Like thousands of other workers in Thailand and across the region, Chonlada, a 33-year-old mother of one, is suddenly facing a more precarious future amid the trade crackdown.

“We were all shocked. The next day, they told us not to come to work and would not pay for compensation,” Chonlada told Al Jazeera.

US officials say Chinese producers have used Southeast Asian countries to skirt tariffs on China and “dump” cheap solar panels in the US market, harming their businesses.

US trade officials have named Jinko Solar, Trina Solar, Taihua New Energy Hounen, Sunshine Electrical Energy, Runergy and Boviet – all of which have major operations in Thailand, Malaysia, Cambodia or Vietnam – as the worst offenders.

Thai solar exports to the US were worth more than $3.7bn in 2023, just behind Vietnam at $3.9bn, according to the latest US trade data.

Standard Energy Co’s $300m facility in Rayong had been in operation for less than a year, producing its first solar cell to great fanfare in August.

“I’m baffled by what’s just happened,” Kanyawee, a production line manager at Standard Energy who asked to be referred to by his first name only, told Al Jazeera.

“New machines have just landed and we barely used them, they’re very costly too – a few million baht for each machine. They’ve also ordered tonnes of raw materials waiting to be produced.”

Ben McCarron, managing director of the risk consultancy Asia Research & Engagement, said Southeast Asian manufacturers are facing a serious hit from the US turn towards protectionism.

“There are suggestions that manufacturing might exit Southeast Asia entirely if tariffs are introduced either in a blanket way, or that specifically address Chinese-owned manufacturing capacity in the region,” McCarron told Al Jazeera.

“The implications are significant for these countries; Thailand, Vietnam, Cambodia, and Malaysia accounted for about 80 percent of the US’s solar imports in 2024,” McCarron said, adding that “some manufacturers have already begun shutting down and moving out of the region”.

Unfair advantage

US officials and businesses have accused China of giving its solar firms an unfair market advantage with subsidies.

China was the largest funder of clean energy in Southeast Asia between 2013 and 2023, pouring $2.7bn into projects in Indonesia, Malaysia, the Philippines, Thailand, and Vietnam, according to Zero Carbon Analytics.

The American Alliance for Solar Manufacturing Trade Committee, a coalition of seven industry players, was among the loudest voices to lobby for a sharp rise in levies on Chinese imports.

Without a reprieve from the notoriously unpredictable Trump, companies affected by the tariffs have little recourse apart from the ability to file an appeal once a year, or after five years, once a “sunset review” clause takes effect.

Some observers believe the sector may never recover.

“It’s not just the low-skilled labour that was affected by the trade war; many workers in the solar cell supply chain are technicians, skilled labourers,” Tara Buakamsri, an adviser to environmental organisation Greenpeace, told Al Jazeera.

“Even if you make a lot of savings, solar cell exporters would still need to cut down on these skilled workers.”

Others take a more bullish view, arguing that, once the dust has settled, Chinese solar firms will drive the supply of products needed to meet regional emissions targets.

While Thailand, Cambodia, Malaysia and Vietnam welcomed Chinese solar companies in part due to the large sums of up-front investment on offer, they are all also seeking to meet more of their energy needs with cleaner sources.

Before Trump entered office with his tariff agenda, Thailand had announced plans to become carbon neutral by 2050 and produce net-zero greenhouse gas emissions by 2065.

“A slowdown [or halt] in solar exports as a result of US tariffs may supercharge efforts in Southeast Asian markets by Chinese solar companies, which see the region as a critical and well-aligned destination for green technologies,” McCarron said.

“Leftover supply from slowing exports could be absorbed by domestic markets in Thailand, Malaysia, Cambodia, Vietnam, particularly if governments use the situation as a cost-effective opportunity to rapidly accelerate policy initiatives that stimulate domestic solar.”

For Southeast Asia’s solar companies, survival is also likely to depend on governments cutting red tape and loosening the control of oil and gas monopolies over the energy mix.

At the same time, the US’s exclusion of Southeast Asian solar imports could hamper the shift towards greener energy in the world’s top economy.

“Thailand’s solar cell production is heavily export-driven and the US has historically been a major export destination,” Pavida Pananond, a professor of international business at Thammasat Business School in Bangkok, told Al Jazeera.

But solar tariffs will “also hurt American consumers and the green transition in the US as prices become higher”.

The World Bank has slashed its 2025 global growth forecast, citing trade tensions and policy uncertainty as the United States imposed wide-ranging tariffs that weigh on global economic forecasts.

On Tuesday, the bank lowered its projection for global gross domestic product (GDP) growth to 2.3 percent in its latest economic prospects report, down from the 2.7 percent that it expected in January. This is the most recent in a series of downgrades by international organisations.

In its twice-yearly Global Economic Prospects report, the bank lowered its forecasts for nearly 70 percent of all economies, including the US, China and Europe, as well as six emerging market regions, from the levels it projected just six months ago before US President Donald Trump took office.

“That’s the weakest performance in 17 years, outside of outright global recessions,” said World Bank Group chief economist Indermit Gill.

Global growth and inflation prospects for this year and next have worsened because of “high levels of policy uncertainty and this growing fragmentation of trade relations”, Gill added.

“Without a swift course correction, the harm to living standards could be deep,” he warned.

By 2027, the World Bank expects global GDP growth to average 2.5 percent in the 2020s, which would be the slowest rate in any decade since the 1960s.

The Trump effect 

The gloomier projections come as Trump imposed a 10 percent tariff on imports from almost all US trading partners in April as well as higher rates on imports of steel and aluminium. He had initially also announced radically higher rates on dozens of these economies, which he has since suspended until early July.

Trump’s on-again off-again tariff hikes have upended global trade, increased the effective US tariff rate from below 3 percent to the mid-teens, its highest level in almost a century, and triggered retaliation by China and other countries.

He also engaged in tit-for-tat escalation with China, although both countries have hit pause on their trade war and temporarily lowered these staggering duties as well. But a lasting truce remains uncertain.

While the World Bank’s growth downgrade was proportionately larger for advanced economies, the bank cautioned that less wealthy countries have tricky conditions to contend with.

Commodity prices are expected to remain suppressed in 2025 and 2026, Gill said.

This means that some 60 percent of emerging markets and developing economies – which are commodity exporters – have to deal with a “very nasty combination of lower commodity prices and more volatile commodity markets”.

GDP downturn 

By 2027, while the per capita GDP of high-income economies will be approximately where it was in pre-pandemic forecasts, corresponding levels for developing economies would be 6 percent lower.

“Except for China, it could take these economies about two decades to recoup the economic losses of the 2020s,” Gill cautioned.

Even as GDP growth expectations have been revised downwards, inflation rates have been revised up, he said, urging policymakers to contain inflation risks.

Despite trade policy challenges, however, Gill argued that “If the right policy actions are taken, this problem can be made to go away with limited long-term damage.”

He urged for the “differential in tariff and non-tariff measures with respect to the US” to be quickly reduced by other countries, starting with the Group of 20, which brings together the world’s biggest economies.

“Every country should extend the same treatment to other countries,” Gill stressed. “It’s not enough to just liberalise with respect to the US. It’s also important to liberalise with respect to the others.”

The World Bank said developing economies could lower tariffs on all trading partners and convert preferential trade deals into pacts spanning the “full range of cross-border regulatory policies” to boost GDP growth.

Generally, wealthier countries have lower tariffs than developing countries, which could be seeking to protect budding industries or have fewer sources of government revenue.

This month, the Paris-based Organisation for Economic Co-operation and Development also slashed its 2025 global growth forecast from 3.1 percent to 2.9 percent, warning that Trump’s tariffs would stifle the world economy.

This came after the International Monetary Fund in April too cut its world growth expectations for this year on the effects of Trump’s levies, from 3.3 percent to 2.8 percent.

Top US and Chinese officials are meeting in London in a bid to defuse trade tensions over rare earth minerals and advanced technology after a phone call between Presidents Donald Trump and Xi Jinping last week.

The two sides are aiming in Monday’s talks to build on a preliminary trade deal struck in Geneva in May, which briefly lowered the temperature between Washington and Beijing and offered relief for investors battered by months of Trump’s global trade war.

Since then, the agreement to mutually suspend most of the 100 percent-plus tariffs for 90 days has been followed by barbs and accusations from both sides.

But after reaching a tentative understanding with Xi on resuming the flow of critical minerals, Trump said on Thursday that he expected Monday’s meeting to go “very well”.

Who is leading the US and Chinese delegations?

The US delegation in London is headed by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer. The Chinese contingent will be led by Vice Premier He Lifeng.

The venue of the meeting has not been disclosed.

What happened during last week’s call between Xi and Trump?

Monday’s meeting comes four days after Trump and Xi spoke by phone, their first direct interaction since Trump’s January 20 inauguration.

After the more than hourlong call on Thursday, Trump said the conversation was focused on trade and had resulted in a “very positive conclusion” for both countries.

In the first readout of the call, Trump posted on his social media site, Truth Social: “I just concluded a very good phone call with President Xi, of China, discussing some of the intricacies of our recently made, and agreed to, Trade Deal.”

“There should no longer be any questions respecting the complexity of Rare Earth products. Our respective teams will be meeting shortly at a location to be determined. During the conversation, President Xi graciously invited the First Lady and me to visit China, and I reciprocated,” he added.

For his part, Xi was quoted by Chinese state TV as saying after the call that the two countries should strive for a win-win outcome and dialogue and cooperation are the only right choice for both.

In recent weeks, both sides have accused the other of breaching their deal made in Geneva and aimed at dramatically reducing tariffs – an agreement Trump touted as a “total reset” after he announced tariffs on all US trading partners on April 2.

The tentative truce struck on May 11 in Geneva brought US tariffs on Chinese products down from 145 to 30 percent while Beijing slashed levies on US imports from 125 to 10 percent.

The agreement gave both sides a three-month deadline to try to reach a more lasting deal.

In what ways have US export controls played a role?

Renewed tensions between the US and China began just one day after the May 12 announcement of the Geneva agreement to temporarily lower tariffs.

The US Department of Commerce issued guidance saying the use of Ascend artificial intelligence chips from Huawei, a leading Chinese tech company, could violate US export controls.

The agency warned companies “anywhere in the world” against using AI chips made by Huawei, claiming they illegally contained, or were made with, US technology.

Beijing publicly criticised Washington’s move to limit access to American technology, accusing the US of trying to stymie China’s ability to develop cutting-edge AI chips.

On May 15, Chinese Ministry of Commerce spokesperson He Yongqian accused the US of “abusing export control measures”, adding that China would take steps to defend its business interests.

Lutnick wasn’t in Geneva last month, but he is a lead negotiator in Monday’s talks in London. His Commerce Department oversees export controls for the US, and some analysts believe his participation is an indication of how central the issue has become for both sides.

China issuing rare earth licences to US companies

In response to Trump’s April 2 tariff announcement, Beijing suspended exports to all countries of six heavy rare earth metals and associated magnets on April 4.

The move upended global supply chains central to automakers, aerospace manufacturers and military contractors.

China produces 90 percent of the world’s rare earth minerals, which are essential components in permanent magnets – used in a swath of high-tech applications.

Without mentioning rare earths specifically, Trump took to social media last month to attack China’s trade restrictions.

“The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US,” Trump posted on Truth Social on May 30.

After Xi and Trump’s phone call last week, however, the Chinese government hinted that it is addressing US concerns, which have also been echoed by some European companies.

On Saturday, China’s Commerce Ministry said it had approved some rare earth exports, without specifying which countries were involved.

It issued a statement saying it had granted some approvals and “will continue to strengthen the approval of applications that comply with regulations”.

On Monday, the rare earth suppliers of three big US automakers – General Motors, Ford and Stellantis – got clearance from Beijing for a handful of export licences.

Washington wants access to as many rare earths as quickly as possible, Kevin Hassett, head of the National Economic Council at the White House, said on the CBS TV network’s Face the Nation programme on Sunday.

“We want the rare earths, the magnets that are crucial for cellphones and everything else to flow just as they did before the beginning of April, and we don’t want any technical details slowing that down,” Hassett said.

What challenges remain?

Student visas don’t normally figure in trade talks, but a recent US announcement that it would begin revoking the visas of Chinese students has emerged as another flashpoint between Washington and Beijing.

On May 28, US Secretary of State Marco Rubio said the Trump administration would begin to “aggressively” revoke the visas of Chinese university students.

He also said the US would revise visa criteria to enhance scrutiny of all future visa applications from China and Hong Kong.

China is the second largest country of origin for international students in the US after India.

More than 270,000 Chinese students studied in the US in the 2023-2024 academic year.

Beijing’s Ministry of Foreign Affairs spokesperson Mao Ning criticised Washington’s decision to revoke the visas, saying it “damaged” the rights of Chinese students.

Other concerns continue to strain the bilateral relationship from the illicit fentanyl trade to the status of democratically governed Taiwan and US complaints about China’s state-dominated economic model.

Still, Trump’s geopolitical bluster goes well beyond China. While promising to reshape relationships with all US trading partners, Trump so far has reached only one new trade agreement – with the United Kingdom.

Trump’s reduction of US tariffs on Chinese goods runs out in August unless he decides to extend it. If deals aren’t reached, the White House said Trump plans to restore tariff rates to the levels he first announced in April.