tariff

The court declined to fast-track the review of the dispute over Trump having legal power to impose broad tariffs.

The United States Supreme Court has declined to speed up its consideration of whether to take up a challenge to President Donald Trump’s sweeping tariffs even before lower courts have ruled in the dispute.

The Supreme Court denied on Friday a request by a family-owned toy company, Learning Resources, that filed the legal challenge against Trump’s tariffs to expedite the review of the dispute by the nation’s top judicial body.

The company, which makes educational toys, won a court ruling on May 29 that Trump cannot unilaterally impose tariffs using the emergency authority he had claimed. That ruling is currently on hold, leaving the tariffs in place for now.

Learning Resources asked the Supreme Court to take the rare step of immediately hearing the case to decide the legality of the tariffs, effectively leapfrogging the US Court of Appeals for the District of Columbia Circuit in Washington, where the case is pending.

Two district courts have ruled that Trump’s tariffs are not justified under the law he cited, the International Emergency Economic Powers Act. Both of those cases are on appeal. No court has yet backed the sweeping emergency tariff authority Trump has claimed.

US Transportation Secretary Sean Duffy said he wanted a return to a tariff-free agreement for civil aviation.

Airbus has struck a deal with Vietnamese budget airline Vietjet for up to 150 single-aisle jets at the Paris Air Show as the aviation industry’s hopes to return to a tariff-free trade agreement were given a boost by United States Transportation Secretary Sean Duffy.

The French planemaker announced the deal on Tuesday.

Airbus is the main supplier of jets to Vietnam, accounting for 86 percent of the planes currently operated by Vietnamese airlines. The export-dependent Southeast Asian country is under pressure from Washington to buy more US goods.

Vietjet Chairwoman Nguyen Thi Phuong Thao said the scale of the airline’s orders was backed by plans to develop a major aviation hub in Vietnam, which Airbus says has seen its aviation market grow by 7.5 percent a year.

A deal for 150 A321neos could be worth around $9.4bn, according to estimated prices provided by Cirium Ascend.

The agreement was the latest in a flurry of business announced by Airbus at the world’s biggest aviation trade fair in Paris, France.

Airbus has made gains against its chief competitor Boeing as airlines reconsider purchases of the US-made jets amid ongoing tariff threats in recent months. In May, budget airline Ryanair threatened to pull orders of Boeing aircraft amid tariff threats.

A tariff truce?

Duffy said he wanted civil aviation to return to a 1979 zero-tariff trade agreement, in one of the clearest signs yet that the administration of US President Donald Trump might favour such a move. However, Duffy added that while the White House was aware that the US is a net exporter in aerospace, it was also dealing with a complex tariff situation.

“Now, again, you look at what free trade has done for aviation. It’s been remarkable for them. It’s a great space of net exporters,” Duffy said. “And so the White House understands that, but if you go over there and you see the moving parts of what they’re dealing with, it is pretty intense and it’s a lot.”

Trump’s sweeping 10 percent import tariffs are a headache for an industry already battling supply chain challenges and facing fresh turbulence from last week’s deadly Air India crash and conflict in the Middle East.

In early May, the US Commerce Department launched a “Section 232” national security investigation into imports of commercial aircraft, jet engines and parts that could form the basis for even higher tariffs on such imports.

Airlines, planemakers and several US trading partners have been lobbying Trump to restore the tariff-free regime under the 1979 agreement.

Boeing was having a subdued show and parking announcements while focusing on the probe into last week’s fatal crash of an Air India Boeing 787 and after it racked up huge deals during Trump’s recent tour of the Middle East.

Attention turned to another big Airbus customer, AirAsia, long associated with buzzy show finales and looking at buying 100 A220s, with Brazil’s Embraer seeking to wrest away the deal after losing a key contest in Poland, delegates said. Airbus was also expected to reveal Egyptair as the airline behind a recent unidentified order for six more A350s.

Even so, Airbus’s hopes of using the event as a showcase for its first significant deal with Royal Air Maroc faded after the airline postponed plans to announce a larger Boeing deal, delegates said.

KANANASKIS, Alberta — Six of the Group of Seven leaders are trying on the final day of their summit Tuesday to show the wealthy nations’ club still has the clout to shape world events despite the early departure of President Trump.

Canadian Prime Minister Mark Carney and his counterparts from the U.K., France, Germany, Italy and Japan will be joined by Ukrainian President Volodymyr Zelensky and NATO chief Mark Rutte to discuss Russia’s relentless war on its neighbor.

World leaders had gathered in Canada with the specific goal of helping to defuse a series of pressure points, only to be disrupted by a showdown over Iran’s nuclear program that could escalate in dangerous and uncontrollable ways. Israel launched an aerial bombardment campaign against Iran on Friday, and Iran has hit back with missiles and drones.

Trump departed a day early from the summit in the Canadian Rocky Mountain resort of Kananaskis, leaving late Monday and saying: “I have to be back, very important.” As conflict between Israel and Iran intensified, he declared that Tehran should be evacuated “immediately” — while also expressing optimism about a deal to stop the violence.

Before leaving, Trump joined the other leaders in issuing a statement saying Iran “can never have a nuclear weapon” and calling for a “de-escalation of hostilities in the Middle East, including a ceasefire in Gaza.” Getting unanimity — even on a short and broadly worded statement — was a modest measure of success for the group.

At the summit, Trump warned that Tehran must curb its nuclear program before it’s “too late.” He said Iranian leaders would “like to talk” but they had already had 60 days to reach an agreement on their nuclear ambitions and failed to do so before the Israeli aerial assault began. “They have to make a deal,” he said.

Asked what it would take for the U.S. to get involved in the conflict militarily, Trump said Monday morning, “I don’t want to talk about that.“

On the overnight flight back to Washington, Trump did not seem bothered by his decision to skip a series of meetings that would address the war in Ukraine and trade issues.

“We did everything I had to do at the G7,” he told reporters aboard Air Force One before landing early Tuesday morning. “We had a good G7.”

The sudden departure only heightened the drama of a world that seems on the verge of several firestorms. Trump has already imposed severe tariffs on multiple nations that risk a global economic slowdown. There has been little progress on settling the wars in Ukraine and Gaza.

Trump’s stance on Ukraine puts him fundamentally at odds with the other G7 leaders, who back Ukraine and are clear that Russia is the aggressor in the war.

The U.S. president on Monday suggested there would have been no war if G7 members hadn’t expelled Putin from the organization in 2014 for annexing Crimea.

Kremlin spokesman Dmitry Peskov on Tuesday said the G7 looks “very pale and quite useless” compared to “for example, such formats as the G20.”

With talks on ending the war in Ukraine at an impasse, Starmer said Britain and other G7 members were slapping new tariffs on Russia in a bid to get it to the ceasefire negotiating table. Zelensky is due to attend the summit Tuesday at Carney’s invitation, along with other leaders, including Rutte and Indian Prime Minister Narendra Modi.

Trump declined to join in the sanctions on Russia, saying he would wait until Europe did so first.

“When I sanction a country, that costs the U.S. a lot of money, a tremendous amount of money,” he said.

Trump had been scheduled before his departure to meet with Zelensky and with Mexican President Claudia Sheinbaum.

On the Middle East, Merz told reporters that Germany was planning to draw up a final communique proposal on the Israel-Iran conflict that will stress that “Iran must under no circumstances be allowed to acquire nuclear weapons-capable material.”

Trump also seemed to put a greater priority on addressing his grievances with other nations’ trade policies than on collaboration with G7 allies. The U.S. president has imposed 50% tariffs on steel and aluminum as well as 25% tariffs on autos. Trump is also charging a 10% tax on imports from most countries, though he could raise rates on July 9, after the 90-day negotiating period set by him would expire.

He announced with Starmer that they had signed a trade framework Monday that was previously announced in May, with Trump saying that British trade was “very well protected’ because ”I like them, that’s why. That’s their ultimate protection.”

Gillies and Lawless write for the Associated Press. AP writers Will Weissert in Banff, Alberta, Josh Boak in Calgary, Alberta and Chris Megerian in Washington contributed to this report.

KANANASKIS, Canada — The Group of 7 summit began in Canada on Monday with world leaders scrambling to contain the escalating conflict between Israel and Iran over Tehran’s nuclear program, with President Trump reiterating his call for the two nations to start negotiating.

“They should talk, and they should talk immediately,” he told reporters.

British Prime Minister Keir Starmer said all G-7 leaders agree they “have to find a way to de-escalate the situation” in the Middle East because the Israel-Iran conflict risks inflaming the “tinderbox” of Gaza and hurting the global economy.

Starmer said he’d spoken to Trump about the issue, adding “the risk of the conflict escalating is obvious, I think, and the implications, not just for the region but globally, are really immense, so the focus has to be on de-escalation.”

German Chancellor Friedrich Merz told reporters Monday ahead of the summit beginning in the Canadian Rocky Mountains that Germany is planning to draw up a final communique proposal on the Israel-Iran conflict that will stress that “Iran must under no circumstances be allowed to acquire nuclear weapons-capable material.”

But as Trump met with Canadian Prime Minister Mark Carney, he also stressed it was a mistake to remove Russia from the organization in 2014 and doing so had destabilized the world. He also suggested it would be a good idea to add China to the G-7.

The U.S. president also seemed to put a greater priority on his planned emphasis on addressing his grievances with other nations’ trade policies.

“Our primary focus will be trade,” Trump said of his talks with Carney.

This year’s G-7 summit is full of combustible tensions, and it’s unclear how the gathered world leaders can work together to resolve them. Trump already has hit several dozen nations with severe tariffs that risk a global economic slowdown. There is little progress on settling the wars in Ukraine and Gaza, and now a new conflict between Israel and Iran has arisen.

Add to all of that the problems of climate change, immigration, drug trafficking, new technologies such as artificial intelligence and China’s continued manufacturing superiority and chokehold on key supply chains.

“We’re gathering at one of those turning points in history,” Carney said. “The world’s more divided and dangerous.”

But as the news media were escorted from the opening session, Carney could be heard as he turned to Trump and referenced how his remarks about the Middle East, Russia and China had already drawn attention to the summit.

“Mr. President, I think you’ve answered a lot of questions already,” Carney said.

Trump wants to focus on trade, though he may have to balance those issues with the broader need by the G-7 countries — which also include France, Italy and Japan — to project a united front to calm down a world increasingly engulfed in chaos.

Asked if he planned to announce any trade agreements at the G-7 as he left the White House on Sunday, Trump said: “We have our trade deals. All we have to do is send a letter, ‘This is what you’re going to have to pay.’ But I think we’ll have a few, few new trade deals.”

Also at stake might be the survival of the G-7 itself when the Trump administration has sent mixed signals about whether the president will attend the November Group of 20 summit in South Africa.

The German, U.K., Japanese and Italian governments have each signaled a belief that a friendly relationship with Trump this year can help to keep any public drama at a minimum, after the U.S. president in 2018 opposed a joint communique when the G-7 summit was last held in Canada.

Going into the summit, there was no plan for a joint statement this year, a sign that the Trump administration sees no need to build a shared consensus with fellow democracies if it views such a statement as contrary to its goals of new tariffs, more fossil fuel production and a Europe that is less dependent on the U.S. military.

“The Trump administration almost certainly believes that no deal is better than a bad deal,” said Caitlin Welsh, a director at the Center for Strategic and International Studies think tank who was part of Trump’s team for the G-7 in Trump’s first term.

The White House has stayed decidedly mum about its goals for the G-7, which originated as a 1973 finance ministers’ meeting to address the oil crisis and evolved into a yearly summit meant to foster personal relationships among world leaders and address global problems.

The G-7 briefly expanded to the G-8 with Russia as a member, only for Russia to be expelled in 2014 after annexing Crimea and taking a foothold in Ukraine that preceded its aggressive 2022 invasion of that nation.

Trump will have a series of bilateral meetings during the summit with other world leaders while in Canada. Beyond Carney, he’s also expected to have bilateral meetings or pull-aside conversations with Starmer, Merz, Mexican President Claudia Sheinbaum and Ukrainian President Volodymyr Zelensky.

Ahead of his meeting with Trump, Zelensky said one of the topics for discussion will be a “defense package” that Ukraine is ready to purchase from the U.S. as part of the ongoing war with Russia.

The U.S. president has imposed 25% tariffs on steel, aluminum and autos, all of which have disproportionately hit Japan. Trump is also charging a 10% tax on imports from most countries, though he could raise rates on July 9, after the 90-day negotiating period set by him would expire.

The United Kingdom reached a trade framework with the U.S. that included quotas to protect against some tariffs, but the 10% baseline would remain as the Trump administration is banking on tariff revenues to help cover the cost of its income tax cuts.

Canada and Mexico face separate tariffs of as much as 25% that Trump put into place under the auspices of stopping fentanyl smuggling, through some products are still protected under the 2020 U.S.-Mexico-Canada Agreement signed during Trump’s first term.

Merz said of trade talks that “there will be no solution at this summit, but we could perhaps come closer to a solution in small steps.”

The Trump administration has insisted that its broad tariffs will produce trade agreements that box out China, though it’s unclear how antagonizing trade partners would make them want to strengthen their reliance on the U.S. Carney has been outspoken in saying Canada can no longer look to the U.S. as an enduring friend.

That might leave Trump with the awkward task of wanting to keep his tariffs in place while also trying to convince other countries that they’re better off siding with the U.S. than China.

Boak, Gillies and Lawless write for the Associated Press. Boak reported from Calgary, Canada. AP writer Kirsten Grieshaber contributed to this report.

WASHINGTON — President Trump has long bet that he can scare allies into submission — a gamble that is increasingly being tested ahead of the Group of Seven summit beginning Monday in Canada.

He’s threatened stiff tariffs in the belief that other nations would crumple. He’s mused about taking over Canada and Greenland. He’s suggested he will not honor NATO’s obligations to defend partners under attack. And he’s used Oval Office meetings to try to intimidate the leaders of Ukraine and South Africa.

But many world leaders see fewer reasons to be cowed by Trump, even as they recognize the risks if he followed through on his threats. They believe he will ultimately back down — since many of his plans could inflict harm on the U.S. — or that he can simply be charmed and flattered into cooperating.

“Many leaders still seem intimidated by Trump, but increasingly they are catching on to his pattern of bullying,” said Jeremy Shapiro, research director at the European Council on Foreign Relations. “In places as diverse as Canada, Iran, China and the EU, we are seeing increasing signs that leaders now recognize that Trump is afraid of anything resembling a fair fight. And so they are increasingly willing to stand up to him.”

In the 22 instances in which Trump has publicly threatened military action since his first term, the U.S. only used force twice, according to a May analysis by Shapiro.

World leaders feel comfortable standing up to Trump

Ahead of the G-7 summit, there are already signs of subtle pushback against Trump from fellow leaders in the group. French President Emanuel Macron planned to visit Greenland over the weekend in a show of European solidarity. Canadian Prime Minister Mark Carney has said the U.S. is no longer the “predominant” force in the world after Trump’s tariffs created fissures in a decades-long partnership between the U.S. and its northern neighbor.

“We stood shoulder to shoulder with the Americans throughout the Cold War and in the decades that followed, as the United States played a predominant role on the world stage,” Carney said this past week in French. “Today, that predominance is a thing of the past.”

The new prime minister added that with the fall of the Berlin Wall in 1989, the U.S. became the global hegemon, a position of authority undermined by Trump’s transactional nature that puts little emphasis on defending democratic values or the rule of law.

“Now the United States is beginning to monetize its hegemony: charging for access to its markets and reducing its relative contributions to our collective security,” Carney said.

Israel’s attack on Iran has added a new wrinkle to the global picture as the summit leaders gather to tackle some of the world’s thorniest problems.

A senior Canadian official said it was decided early on that the G-7 won’t be issuing a joint communiqué as it has at past summits — an indication of how hard it can be to get Trump on the same page with other world leaders. The White House said individual leader statements will be issued on the issues being discussed.

Speaking last month at a conference in Singapore, Macron called France a “friend and an ally of the United States” but pushed back against Trump’s desire to dominate what other countries do. Macron said efforts to force other nations to choose between the U.S. and China would lead to the breakdown of the global order put in place after World War II.

“We want to cooperate, but we do not want to be instructed on a daily basis what is allowed, what is not allowed, and how our life will change because of the decision of a single person,” Macron said.

Japanese Prime Minister Shigeru Ishiba pushed back against Trump’s agenda of levying higher tariffs on imported goods, arguing it would hurt economic growth. The Japanese leader specifically called Trump ahead of the summit to confirm their plans to talk on the sidelines, which is a greater focus for Japan than the summit itself.

“I called him as I also wanted to congratulate his birthday, though one day earlier,” Ishiba said.

Trump cares about being tough, but G-7 is a chance to reset relations

Sen. Jeanne Shaheen (D-N.H.), the ranking member of the Foreign Relations Committee, said the summit was an opportunity for Trump to “mend” relationships with other countries so China would be unable to exploit differences among the G-7.

She said other foreign leaders are “not intimidated” by Trump’s actions, which could be driving them away from tighter commitments with the U.S.

“The conversations that I’ve had with those leaders suggest that they think that the partnership with the United States has been really important, but they also understand that there are other opportunities,” Shaheen said.

The White House did not respond to emailed questions for this story.

Many leaders feel more confident that they can sidestep Trump’s threats

Having originally made his reputation in real estate and hospitality, Trump has taken kindly to certain foreign visitors, such as U.K. Prime Minister Keir Starmer, German Chancellor Friedrich Merz and Italian Prime Minister Giorgia Meloni.

Starmer has sought to keep Trump in line with Europe in supporting Ukraine and NATO instead of brokering any truces that would favor Russia. He has echoed the president’s language about NATO members spending more on defense. But in his Oval Office visit, Starmer also pleased Trump by delivering an invite for a state visit from King Charles III.

The German government said it, too, wanted to send a public signal of unity, saying that while Trump’s recent meeting with Merz at the White House went harmoniously, the next test is how the relationship plays out in a team setting.

There will also be other world leaders outside of the G-7 nations attending the summit in mountainous Kananaskis, including Ukrainian President Volodymyr Zelensky, whom Trump dressed down in the Oval Office.

Italy’s Meloni has positioned herself as a “bridge” between the Trump administration and the rest of Europe. But Italy’s strong support of Ukraine and Trump’s threatened tariffs on European goods have put Meloni, the only European leader to attend Trump’s inauguration, in a difficult position.

Mark Sobel, U.S. chair of the Official Monetary and Financial Institutions Forum, an independent think tank, said Trump’s “trade policies, backing for right wing European movements, seeming preference for dealing with authoritarians and many of his other actions are alienating our G-7 allies,” even if the U.S. president is correct that Europe needs to do more on defense.

But even as other G-7 leaders defuse any public disputes with Trump, the U.S. president’s vision for the world remains largely incompatible with they want.

“In short, behind the curtains, and notwithstanding whatever theater, the Kananaskis summit will highlight a more fragmented G-7 and an adrift global economy,” Sobel said.

Boak writes for the Associated Press. AP reporters Rob Gillies in Toronto, Mari Yamaguchi in Tokyo, Sylvie Corbet in Paris, Jill Lawless in London, Geir Moulson in Berlin and Nicole Winfield in Rome contributed to this report.

Published on
12/06/2025 – 8:00 GMT+2

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The EU is wrangling over a provision of Donald Trump’s so-called “Big Beautiful Bill” for the US budget that could see European companies taxed higher than others in retaliation for certain taxes imposed on US enterprises overseas, the vice-chair of the European Parliament’s tax subcommittee has told Euronews.

The German European People’s Party MEP Markus Ferber said the European Commission has raised the proposed legislation—already approved by the House of Representatives—in ongoing tariff negotiations with the Trump administration.

“We are concerned because within this ‘One Big Beautiful Bill’ there are special taxes aimed at jurisdictions that impose taxes on the US,” Ferber told Euronews.

He added that jurisdictions like the EU, which have already implemented the OECD agreement establishing a global minimum tax of 15% on multinationals, are directly targeted.

“It could also affect member states that have introduced a digital services tax,” he noted.

The OECD agreement, approved by 140 countries – though as yet unratified by the US – introduced a global minimum tax of 15% on the profits of multinational companies, regardless of where those profits are declared, with effect from 1 January 2024. The EU has transposed the agreement into law and applies it to multinationals operating within the Union, to the ire of the Trump administration.

Meanwhile countries such as Denmark, Portugal and Poland have implemented digital services taxes targeting US tech giants, while others are in the process of creating one.

The US is now looking to retaliate against taxes it deems unfair through a provision of the “Big Beautiful Bill” which would hit foreign investors with a bump in US income tax by five percent points each year, potentially taking the rate up to 20%, in addition to existing taxes.

The Commission is concerned, officials said.

According to Ferber, the EU executive has put this provision of the US budget bill on the negotiating table. “But we are not sure yet that the US agreed to put it in the basket,” the MEP said.

For several weeks, the EU and the US have been discussing a resolution to the trade dispute that has been ongoing since mid-March.

The US impose 50% tariffs on EU steel and aluminium, 25% on cars and 10% on all EU imports.

For its part, the EU has prepared countermeasures targeting around €115 billion worth of US products. These measures are either suspended until July or still awaiting approval by EU member states.

BEIJING — U.S.-China trade talks in London this week are expected to take up a series of fresh disputes that have buffeted relations, threatening a fragile truce over tariffs.

Both sides agreed in Geneva last month to a 90-day suspension of most of the 100%-plus tariffs they had imposed on each other in an escalating trade war that had sparked fears of recession.

Since then, the U.S. and China have exchanged angry words about advanced semiconductors that power artificial intelligence, “rare earths” that are vital to carmakers and other industries, and visas for Chinese students at American universities.

President Trump spoke at length with Chinese leader Xi Jinping by phone Thursday in an attempt to put relations back on track. Trump announced on social media the next day that trade talks would be held Monday in London.

Technology is a major sticking point

The latest frictions began just a day after the May 12 announcement of the Geneva agreement to “pause” tariffs for 90 days.

The U.S. Commerce Department issued guidance saying the use of Ascend AI chips from Huawei, a leading Chinese tech company, could violate U.S. export controls. That’s because the chips were probably developed with American technology despite restrictions on its export to China, the guidance said.

The Chinese government wasn’t pleased. One of its biggest beefs in recent years has been over U.S. moves to limit the access of Chinese companies to technology, and in particular to equipment and processes needed to produce the most advanced semiconductors.

“The Chinese side urges the U.S. side to immediately correct its erroneous practices,” a Chinese Commerce Ministry spokesperson said.

U.S. Commerce Secretary Howard Lutnick wasn’t in Geneva but will join the talks in London. Analysts say that suggests at least a willingness on the U.S. side to hear out China’s concerns on export controls.

China shows signs of easing up on rare earths

One area where China holds the upper hand is in the mining and processing of rare earths. They are crucial for not only autos but also other products such as robots and military equipment.

The Chinese government started requiring producers to obtain a license to export seven rare-earth elements in April. Resulting shortages sent automakers worldwide into a tizzy. As stockpiles ran down, some worried they would have to halt production.

Trump, without mentioning rare earths specifically, took to social media to attack China.

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

The Chinese government indicated Saturday that it is addressing the concerns, which have come from European companies as well. A Commerce Ministry statement said it had granted some approvals and “will continue to strengthen the approval of applications that comply with regulations.”

The scramble to resolve the rare-earth issue shows that China has a strong card to play if it wants to strike back against tariffs or other measures.

Plan to revoke student visas adds to tensions

Student visas don’t normally figure in trade talks, but a U.S. announcement that it would begin revoking the visas of some Chinese students has emerged as another thorn in the relationship.

The Chinese Commerce Ministry raised the issue when asked last week about the accusation that it had violated the consensus reached in Geneva.

It replied that the U.S. had undermined the agreement by issuing export control guidelines for AI chips, stopping the sale of chip design software to China and saying it would revoke Chinese student visas.

“The United States has unilaterally provoked new economic and trade frictions,” the ministry said in a statement posted on its website.

U.S. Secretary of State Marco Rubio said in a May 28 statement that the United States would “aggressively revoke visas for Chinese students, including those with connections to the Chinese Communist Party or studying in critical fields.”

More than 270,000 Chinese students studied in the U.S. in the 2023-24 academic year.

Moritsugu writes for the Associated Press.

WASHINGTON — President Trump said Thursday that his first call with Chinese leader Xi Jinping since returning to office was “very positive,” announcing that the two countries will hold trade talks in hopes of breaking an impasse over tariffs and global supplies of rare earth minerals.

“Our respective teams will be meeting shortly at a location to be determined,” Trump wrote on his social media platform after the call, which he said lasted an hour and a half.

Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer will represent the U.S. side in negotiations.

The Republican president, who returned to the White House for a second term in January, also said Xi “graciously” invited him and First Lady Melania Trump to China, and Trump reciprocated with his own invitation for Xi to visit the United States.

The Chinese Foreign Ministry said Trump initiated the call between the leaders of the world’s two biggest economies.

The ministry said in a statement that Xi asked Trump to “remove the negative measures” that the U.S. has taken against China. It also said that Trump said “the U.S. loves to have Chinese students coming to study in America,” although his administration has vowed to revoke some of their visas.

Comparing the bilateral relationship to a ship, Xi told Trump that the two sides need to “take the helm and set the right course” and to “steer clear of the various disturbances and disruptions,” according to the ministry statement.

Trump had declared one day earlier that it was difficult to reach a deal with Xi.

“I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!” Trump posted Wednesday on his social media site.

Craig Singleton, senior director of China program at the Foundation for Defense of Democracies, said the phone call “simply paused escalation on trade” but “didn’t resolve core tensions” in the bilateral relations.

With the White House still weighing more punitive measures, the current calm could be upended as Beijing also is prepared to fight back the moment Washington escalates, Singleton said. “We’re likely one competitive action away from further confrontation,” he said.

In his note, Gabriel Wildau, managing director at the consultancy Teneo, wrote that the call “prevented derailment of trade talks but produced no clear breakthroughs on key issues.”

Trade negotiations between the United States and China stalled shortly after a May 12 agreement between the two countries to reduce their tariff rates while talks played out. Behind the gridlock has been the continued competition for an economic edge.

The U.S. accuses China of not exporting critical minerals, and the Chinese government objects to America restricting its sale of advanced chips and access to student visas for college and graduate students.

Trump has lowered his 145% tariffs on Chinese goods to 30% for 90 days to allow for talks. China also reduced its taxes on U.S. goods from 125% to 10%. The back and forth has caused sharp swings in global markets and threatens to hamper trade between the two countries.

Bessent had suggested that only a conversation between Trump and Xi could resolve these differences so that talks could restart in earnest. The underlying tension between the two countries may persist, though.

During the call, Xi said that the Chinese side is sincere about negotiating and “at the same time has its principles,” and that “the Chinese always honor and deliver what has been promised,” according to the Foreign Ministry.

Even if negotiations resume, Trump wants to lessen America’s reliance on Chinese factories and reindustrialize the U.S., whereas China wants the ability to continue its push into technologies such as electric vehicles and artificial intelligence that could be crucial to securing its economic future.

The United States ran a trade imbalance of $295 billion with China in 2024, according to the Census Bureau. Although the Chinese government’s focus on manufacturing has turned it into a major economic and geopolitical power, China has been muddling through a slowing economy after a real estate crisis and COVID-19 pandemic lockdowns weakened consumer spending.

Trump and Xi last spoke in January, three days before Inauguration Day. The pair discussed trade then, as well as Trump’s demands that China do more to prevent the synthetic opioid fentanyl from entering the United States.

Despite long expressing optimism about the prospects for a major deal, Trump became more pessimistic recently.

“The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US,” Trump posted last week. “So much for being Mr. NICE GUY!”

Weissert and Megerian write for the Associated Press.

WASHINGTON — President Trump said Thursday that it might be better to let Ukraine and Russia “fight for a while” before pulling them apart and pursuing peace.

In an Oval Office meeting with German Chancellor Friedrich Merz, Trump likened the war in Ukraine — which Russia invaded in early 2022 — to a fight between two young children who hated each other.

“Sometimes you’re better off letting them a fight for a while and then pulling them apart,” Trump said. He added that he had relayed that analogy to Russian President Vladimir Putin in their phone conversation on Wednesday.

Asked about Trump’s comments as the two leaders sat next to each other, Merz stressed that both he and Trump agreed “on this war and how terrible this war is going on,” pointing to the U.S. president as the “key person in the world” who would be able to stop the bloodshed.

But Merz also emphasized that Germany “was on the side of Ukraine” and that Kyiv was only attacking military targets, not Russian civilians.

“We are trying to get them stronger,” Merz said of Ukraine.

Thursday’s meeting marked the first time that the two leaders sat down in person. After exchanging pleasantries — Merz gave Trump a gold-framed birth certificate of the U.S. president’s grandfather Friedrich Trump, who emigrated from Germany — the two leaders were to discuss issues such as Ukraine, trade and NATO spending.

Trump and Merz have spoken several times by phone, either bilaterally or with other European leaders, since Merz took office on May 6. German officials say the two leaders have started to build a “decent” relationship, with Merz wanting to avoid the antagonism that defined Trump’s relationship with one of his predecessors, Angela Merkel, in the Republican president’s first term.

The 69-year-old Merz — who came to office with an extensive business background — is a conservative former rival of Merkel’s who took over her party after she retired from politics.

A White House official said topics that Trump is likely to raise with Merz include Germany’s defense spending, trade, Ukraine and what the official called “democratic backsliding,” saying the administration’s view is that shared values such as freedom of speech have deteriorated in Germany and the country should reverse course. The official spoke on condition of anonymity to preview the discussions.

But Merz told reporters Thursday morning that if Trump wanted to talk German domestic politics, he was ready to do that but he also stressed Germany holds back when it comes to American domestic politics.

Merz has thrown himself into diplomacy on Ukraine, traveling to Kyiv with fellow European leaders days after taking office and receiving Ukrainian President Volodymyr Zelensky in Berlin last week. He has thanked Trump for his support for an unconditional ceasefire while rejecting the idea of “dictated peace” or the “subjugation” of Ukraine and advocating for more sanctions against Russia.

In their first phone call since Merz became chancellor, Trump said he would support the efforts of Germany and other European countries to achieve peace, according to a readout from the German government. Merz also said last month that “it is of paramount importance that the political West not let itself be divided, so I will continue to make every effort to produce the greatest possible unity between the European and American partners.”

Under Merz’s immediate predecessor, Olaf Scholz, Germany became the second-biggest supplier of military aid to Ukraine after the United States. Merz has vowed to keep up the support and last week pledged to help Ukraine develop its own long-range missile systems that would be free of any range limits.

In his remarks on Thursday, Trump still left the threat of sanctions on the table. He said sanctions could be imposed for both Ukraine and Russia.

“When I see the moment where it’s not going to stop … we’ll be very, very tough,” Trump said.

At home, Merz’s government is intensifying a drive that Scholz started to bolster the German military after Russia launched its full-scale invasion of Ukraine. In Trump’s first term, Berlin was a target of his ire for failing to meet the current NATO target of spending 2% of gross domestic product on defense, and Trump is now demanding at least 5% from allies.

The White House official said the upcoming NATO summit in the Netherlands later this month is a “good opportunity” for Germany to commit to meeting that 5% mark.

Scholz set up a 100-billion euro ($115 billion) special fund to modernize Germany’s armed forces — called the Bundeswehr — which had suffered from years of neglect. Germany has met the 2% target thanks to the fund, but it will be used up in 2027.

Merz has said that “the government will in the future provide all the financing the Bundeswehr needs to become the strongest conventional army in Europe.” He has endorsed a plan for all allies to aim to spend 3.5% of GDP on their defense budgets by 2032, plus an extra 1.5% on potentially defense-related things like infrastructure.

Another top priority for Merz is to get Germany’s economy, Europe’s biggest, moving again after it shrank the past two years. He wants to make it a “locomotive of growth,” but Trump’s tariff threats are a potential obstacle for a country whose exports have been a key strength. At present, the economy is forecast to stagnate in 2025.

Germany exported $160 billion worth of goods to the U.S. last year, according to the Census Bureau. That was about $85 billion more than what the U.S. sent to Germany, a trade deficit that Trump wants to erase.

“Germany is one of the very big investors in America,” Merz told reporters Thursday morning. “Only a few countries invest more than Germany in the USA. We are in third place in terms of foreign direct investment.”

The U.S. president has specifically gone after the German auto sector, which includes major brands such as Audi, BMW, Mercedes Benz, Porsche and Volkswagen. Americans bought $36 billion worth of cars, trucks and auto parts from Germany last year, while the Germans purchased $10.2 billion worth of vehicles and parts from the U.S.

Trump’s 25% tariff on autos and parts is specifically designed to increase the cost of German-made automobiles in hopes of causing them to move their factories to the U.S., even though many of the companies already have plants in the U.S. with Volkswagen in Tennessee, BMW in South Carolina and Mercedes-Benz in Alabama and South Carolina.

There’s only so much Merz can achieve on his view that tariffs “benefit no one and damage everyone” while in Washington, as trade negotiations are a matter for the European Union’s executive commission. Trump recently delayed a planned 50% tariff on goods coming from the European Union, which would have otherwise gone into effect this month.

One source of strain in recent months is a speech Vice President JD Vance gave in Munich shortly before Germany’s election in February, in which he lectured European leaders about the state of democracy on the continent and said there is no place for “firewalls.”

That term is frequently used to describe mainstream German parties’ refusal to work with the far-right Alternative for Germany, which finished second in the election and is now the biggest opposition party.

Merz criticized the comments. He told ARD television last month that it isn’t the place of a U.S. vice president “to say something like that to us in Germany; I wouldn’t do it in America, either.”

Kim, Grieshaber and Moulson write for the Associated Press. Moulson reported from Berlin. AP writer Josh Boak in Washington contributed to this report.

The leaders of Canada and Mexico have criticised the latest hike in steel and aluminium tariffs under United States President Donald Trump, who increased import taxes on the metal from 25 to 50 percent.

The international condemnation came just hours after the latest tariff increase went into effect early on Wednesday.

Speaking to reporters on Wednesday, Canadian Prime Minister Mark Carney said the tariff increases were “unjustified”.

“They’re illegal. They’re bad for American workers, bad for American industry and, of course, for Canadian industry,” he said.

Mexican President Claudia Sheinbaum, meanwhile, pledged to pursue countermeasures if the Trump administration refuses to grant tariff relief. She warned that the tariffs would have a “huge impact” on Mexico’s steel and aluminium industries.

“This isn’t about an eye for an eye, but rather about protecting our industry and our jobs,” she added, without specifying what steps her government might take.

Canada calls for action

Wednesday’s tariff hike had been unveiled last Friday, when Trump held a rally with steelworkers outside Pittsburgh, Pennsylvania.

That region of the US is a part of the Rust Belt, an area that has been heavily affected by the decline in US manufacturing. Trump pledged to use tariffs and other measures to bring jobs and investments back to the area.

Previously, in March, Trump set tariffs on steel and aluminium at 25 percent. But he threatened to lift that rate to 50 percent specifically for Canadian imports of the metals, a plan he later appeared to walk back.

Those threats, however, roiled relations between the US and its northern neighbour in particular. Canada is the top supplier of steel to the US, followed by Brazil and then Mexico. South Korea and China also top the list.

Canada is also responsible for about 40 percent of aluminium imports to the US, followed by the UAE, Russia and Mexico. Carney’s government has pledged to pursue retaliatory measures so long as Trump’s tariffs remain in place.

On Wednesday, one of Canada’s largest labour unions, Unifor, called on Carney to take immediate action against the latest tariff hike, including by limiting the country’s exports of critical metals to the US.

“Unifor is urging the federal government to act without delay to defend Canada’s manufacturing sector and counter the escalating trade assault,” the union said in a statement.

Premier Doug Ford — who leads the top manufacturing province in Canada, Ontario — also called for Canada to respond in kind and “slap another 25 percent” on US steel imports.

“It’s tariff for tariff, dollar for dollar. We need to tariff the steel coming into Canada an additional 25 percent, totalling 50 percent,” Ford told reporters. “Everything’s on the table right now.”

Navigating global trade pacts

Both Canada and Mexico have been hard hit by Trump’s aggressive tariffs, which include a blanket 25-percent tax on all imports not subject to the US-Mexico-Canada free trade agreement (USMCA), as well as a separate 25-percent levy on automobile imports.

The three countries have highly integrated economies, with products like automobiles being built using supplies and factories from multiple locations.

The USMCA pact was agreed upon during Trump’s first term, from 2017 to 2021. But he has since signalled he hopes to renegotiate the free-trade deal to get more favourable terms for the US.

But the doubling of the US steel and aluminium tariffs is expected to have a global impact, well beyond North America.

The European Union is also bracing for the increase. The bloc’s trade commissioner, Maros Sefcovic, met US Trade Representative Jamieson Greer on the sidelines of a meeting for the Organisation for Economic Cooperation and Development (OECD) on Wednesday.

“We’re advancing in the right direction at pace – and staying in close contact to maintain the momentum,” Sefcovic wrote on X afterwards.

UK Trade Secretary Jonathan Reynolds also met with Greer, and he said steel and aluminium tariffs would remain at 25 percent for his country. The two countries have been in the process of forging a post-Brexit bilateral trade agreement, announcing a “breakthrough” last month.

“We’re pleased that as a result of our agreement with the US, UK steel will not be subject to these additional tariffs,” a British government spokesperson said.

‘Extremely hard to make a deal’

Trump’s latest tariff hike comes days after a federal court ruled that his so-called reciprocal tariffs — which imposed customised taxes on nearly all US trading partners — were illegal.

Trump had imposed those tariffs in April, only to pause them for 90 days. The court’s ruling was quickly paused while legal proceedings continued, and Trump’s tariffs have been allowed to remain in place for now.

One of the hardest hit countries has been China, which saw US tariffs against its exports skyrocket to 145 percent earlier this year.

The Trump administration, however, has since sought to reach a deal with China to end the trade war between the world’s two largest economies.

The White House said on Monday that Trump would speak to Chinese President Xi Jinping this week, raising hopes the duo could soothe tensions and speed up negotiations.

But on Wednesday, Trump appeared to dampen hopes for a quick deal.

“I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!” he posted on his Truth Social platform.

When asked about the remarks during a regular news briefing, Chinese Foreign Ministry spokesperson Lin Jian said Beijing’s “principles and stance on developing Sino-US relations are consistent”.

Orders tumble by 3.7 percent after a rise in March when businesses increased purchases in anticipation of tariffs.

Orders from United States factories have tumbled in April after a surge in March when businesses had front-loaded purchases in anticipation of tariffs.

New orders for US manufactured goods dropped by 3.7 percent on a monthly basis, worse than economists had expected, according to Census Bureau data released on Tuesday.

Economists polled by the Reuters news agency expected a 3.1 percent drop. Dow Jones forecast a 3.3 percent drop. On an annual basis, however, factory orders rose by 2 percent.

April’s report is in sharp contrast to the 3.4 percent increase in March, which topped five straight months of increases.

Manufacturing, which accounts for 10.2 percent of the US economy, has been put under pressure by President Donald Trump’s aggressive tariffs. Trump sees the tariffs as a tool to raise revenue to offset his promised extension of tax cuts and to revive a long-declining industrial base, a feat that economists argued was impossible in the short term because of labour shortages and other structural issues.

Hardest hit sectors

Orders in the transportation sector fell 17.1 percent, led by a sharp drop in the commercial aircraft sector. Aircraft orders fell by 51.5 percent in April. Orders for motor vehicles, parts and trailers dropped 0.7 percent.

Electrical equipment, appliances and component manufacturing fell by 0.3 percent. But manufacturing for computers and other electronic products actually grew by 1 percent.

Machinery orders also rose 0.6 percent. Excluding transportation, which led the surge in March orders, orders fell 0.5 percent, matching March’s decline of non-transportation goods.

The government also reported that orders for nondefence capital goods excluding aircraft, a measure of business spending plans on equipment, decreased 1.5 percent in April rather than 1.3 percent as estimated last month.

Shipments of these so-called core capital goods fell by an unrevised 0.1 percent, or $1.8bn.

An Institute for Supply Management survey showed manufacturing contracted for a third straight month in May and suppliers took the longest time in nearly three years to deliver inputs to factories.

Published on
03/06/2025 – 15:44 GMT+2

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Major European steel giants saw their share prices falter on Tuesday afternoon, as investors continue to weigh the impact of US President Donald Trump’s plan to double steel and aluminium tariffs from 25% to 50%, with the latter set to take effect from 4 June. 

The announcement has escalated trade tensions and drawn significant criticism from worldwide trade partners. Trump, meanwhile, claims the move will make the US steel industry even stronger. 

He said in a post on his social media platform Truth Social: “Our steel and aluminum industries are coming back like never before. This will be yet another BIG jolt of great news for our wonderful steel and aluminum workers. MAKE AMERICA GREAT AGAIN!”

German steel company Thyssenkrupp’s share price declined 0.5% on Tuesday afternoon on the Frankfurt Stock Exchange. Salzgitter AG’s share price also declined on the exchange, by 0.4%.

Following the trend, ArcelorMittal SA’s stock dipped 1.1% on the Euronext Amsterdam exchange on Tuesday afternoon, while Austrian steel company Voestalpine AG’s share price declined 0.8% on the Vienna Stock Exchange. 

On the other side of the Atlantic, however, major US steel companies such as Cleveland-Cliffs, Nucor, and Steel Dynamics saw their share prices surge on Monday. 

Cleveland-Cliffs’ share price closed 23.2% higher, whereas Nucor’s share price jumped 10.1%. Steel Dynamics’ share price also closed higher, up 10.3% on Monday. 

US businesses risk significant harm due to tariffs

The unpredictability of recent US tariffs continues to pose considerable risks to US businesses, despite Trump’s reassurances that tariffs will benefit the economy. This is mainly because several US companies with international operations could be forced to scramble to find alternative foreign suppliers and customers.

It is also remains unclear how long steel and aluminium tariffs could stay at the 50% level proposed, as Trump continues to negotiate other tariffs with various countries. 

Felix Tintelnot, professor of economics at Duke University, told TIME: “We’re talking about expansion of capacity of heavy industry that comes with significant upfront investments, and no business leader should take heavy upfront investments if they don’t believe that the same policy [will be] there two, three, or four years from now.

“Regardless of whether you’re in favour [of] or against these tariffs, you don’t want the President to just set tax rates arbitrarily, sort of by Executive Order all the time,” he added.

Tintelnot also highlighted that increasing the price of aluminium, which is a very common input material in several sectors such as automotive and construction, would, in turn, hurt those industries, even if there may be some advantages to the domestic US steel and aluminium sectors.

Published on 02/06/2025 – 19:11 GMT+2•Updated
19:13

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EU trade Commissioner Maroš Šefčovič will meet his US counterpart Ambassador Jamieson Greer on Wednesday on the sidelines of an OECD meeting in Paris following a high-level gathering of EU and US experts in Washington on Tuesday against rising tensions over US customs duties.

The Commission is hoping to rekindle negotiation with the US a week after EU Commission President Ursula von der Leyen and US president Donald Trump spoke on the phone, despite Trump’s subsequent decision on 30 May to slap 50% tariffs on EU steel and aluminium.

“The EU in good faith paused its countermeasures on 14 April, to create space for continued negotiations, and following the call between president Ursula von der Leyen and president Donald Trump both sides agreed to accelerate the pace of talks,” Commission spokesperson Olof Gill said on Monday, acknowledging however that Trump’s last announcement on steel and aluminium undermined the Commission’s “ongoing efforts to reach a negotiated solution with the US”.

The Commission has suspended until 14 July a list of countermeasures targeting US products after Trump decided on a 90-Day pause in the trade dispute he launched against his partners across the globe. But the Commission could decide to move forward with those countermeasures, it said.

A second list of US product is also open to consultation from industry until 10 June, when EU member states will adopt them.

“If no mutually acceptable solution is reached, both the existing and the possible additional measures will automatically take effect on 14 July or earlier if circumstances require,“ Gill said.

Šefčovič has already travelled to Washington three times to meet with his US counterparts, but his efforts have so far failed to break the deadlock.

The US and the EU exchanged proposals to begin negotiations, but both sides have dismissed the other’s offers. It wasn’t until EU and US leaders spoke by phone that talks were able to move forward—until President Trump announced new tariffs on steel and aluminium at the end of last week, putting the negotiations at risk once again.

The US currently imposes 25% tariffs on EU steel and aluminium, 25% on cars and 10% on all EU imports. Several investigations in pharma, semiconductors or aircrafts could also lead to more US tariffs on EU goods.

Guess who suddenly has a “TACO” allergy? President Yuge Taco Salad himself.

In the annals of four-letter words and acronyms Donald Trump has long hitched his political fortunes on, the word “taco” may be easy to overlook.

There’s MAGA, most famously. DOGE, courtesy of Elon Musk. Huge (pronounced yuge, of course). Wall, as in the one he continues to build on the U.S.-Mexico border. “Love” for himself, “hate” against all who stand in his way.

There’s a four-letter term, however, that best sums up Trump’s shambolic presidency, one no one would’ve ever associated with him when he announced his first successful presidential campaign a decade ago.

Taco.

His first use of the most quintessential of Mexican meals happened on Cinco de Mayo 2016, when Trump posted a portrait of himself grinning in front of a giant taco salad while proclaiming “I Love Hispanics!” Latino leaders immediately ridiculed his Hispandering, with UnidosUS president Janet Murguia telling the New York Times that it was “clueless, offensive and self-promoting” while also complaining, “I don’t know that any self-respecting Latino would even acknowledge that a taco bowl is part of our culture.”

I might’ve been the only Trump critic in the country to defend his decision to promote taco salads. After all, it’s a dish invented by a Mexican American family at the old Casa de Fritos stand in Disneyland. But also because the meal can be a beautiful, crunchy thing in the right hands. Besides, I realized what Trump was doing: getting his name in the news, trolling opponents, and having a hell of a good time doing it while welcoming Latinos into his basket of deplorables as he strove for the presidency. Hey, you couldn’t blame the guy for trying.

Guess what happened?

Despite consistently trashing Latinos, Trump increased his share of that electorate in each of his presidential runs and leaned on them last year to capture swing states like Arizona and Nevada. Latino Republican politicians made historic gains across the country in his wake — especially in California, where the number of Latino GOP legislators jumped from four in 2022 to a record nine.

The Trump taco salad tweet allowed his campaign to present their billionaire boss to Latinos as just any other Jose Schmo ready to chow down on Mexican food. It used the ridicule thrown at him as proof to other supporters that elites hated people like them. Trump must have at least felt confident the taco salad gambit from yesteryear worked because he reposted the image on social media this Cinco de Mayo, adding the line “This was so wonderful, 9 years ago today!”

It’s not exactly live by the taco, die by the taco. (Come on, why would such a tasty force of good want to hurt anyone)? But Trump is suddenly perturbed by the mere mention of TACO.

Doritos Locos Tacos at the Taco Bell Laguna Beach location.

(Don Leach/Daily Pilot)

That’s an acronym mentioned in a Financial Times newsletter earlier this month that means Trump Always Chickens Out. The insult is in reference to the growing belief in Wall Street that people who invest in stocks should keep in mind that the president talks tough on tariffs but never follows through because he folds under pressure like the Clippers. Or a taco, come to think of it.

Trump raged when CNBC reporter Megan Cassella asked him about TACO at a White House press conference this week.

“Don’t ever say what you said,” the commander in chief snarled before boasting about how he wasn’t a chicken and was actually a tough guy. “That’s a nasty question.”

No other reporter followed up with TACO questions, because the rest of the internet did. Images of Trump in everything from taco suits to taco crowns to carnivorous tacos swallowing Trump whole have bloomed ever since. News outlets are spreading Trump’s out-of-proportion response to something he could’ve just laughed off, while “Jimmy Kimmel Live!” just aired a parody song to the tune of “Macho Man” titled — what else? — “Taco Man.”

The TACO coinage is perfect: snappy, easily understandable, truthful and seems Trump-proof. The master of appropriating insults just can’t do anything to make TACO his — Trump Always Cares Outstandingly just doesn’t have the same ring. It’s also a reminder that Trump’s anti-Latino agenda so far in his administration makes a predictable mockery of his taco salad boast and related Hispandering.

In just over four months, Trump and his lackeys have tried to deport as many Latino immigrants — legal and illegal — as possible and has threatened Mexico — one of this country’s vital trading partners — with a 25% tariff. He has signed executive orders declaring English the official language of the United States and seeking to bring back penalties against truck drivers who supposedly don’t speak English well enough at a time when immigrants make up about 18% of the troquero force and Latinos are a big chunk of it.

Meanwhile, the economy — the main reason why so many Latinos went for Trump in 2024 in the first place — hasn’t improved since the Biden administration and always seems one Trump speech away from getting even wobblier.

As for Latinos, there are some signs Trump’s early presidency has done him no great favors with them. An April survey by the Pew Research Center — considered the proverbial gold standard when it comes to objectively gauging how Latinos feel about issues — found 27% of them approve of how he’s doing as president, down from 36% back in February.

President Trump gives a thumbs up to the cheering crowd after a Latinos for Trump Coalition roundtable in Phoenix in 2020.

(Ross D. Franklin / Associated Press)

Trump was always an imperfect champion of the taco’s winning potential, and not because the fish tacos at his Trump Grill come with French fries (labeled “Idaho” on the menu) and the taco salad currently costs a ghastly $25. He never really understood that a successful taco must appeal to everyone, never shatter or rip apart under pressure and can never take itself seriously like a burrito or a snooty mole.

The president needs to move on from his taco dalliance and pay attention to another four-letter word, one more and more Americans utter after every pendejo move Trump and his flunkies commit:

Help.

US Secretary of State Marco Rubio’s salvo against Chinese students, promising to “aggressively revoke” their visas, is the latest move in heightening tensions between the world’s two largest economies.

Despite a temporary tariff truce reached between them earlier this month, divisions between Washington and Beijing remain wide, with recent ruptures over higher education, artificial intelligence (AI) chips and rare earth minerals.

Here’s all we know about how relations between China and the United States are worsening despite diplomatic efforts.

What did the US and China agree on tariffs?

A US-China trade spat escalated after Trump’s administration raised tariffs on Chinese goods to 145 percent earlier this year, with cumulative US duties on some Chinese goods reaching a staggering 245 percent. China retaliated with 125 percent tariffs of its own on US goods.

Under an agreement reached on May 12 following two days of trade talks in Geneva, tariffs on both sides were dropped by 115 percentage points for 90 days, during which time negotiators hope to secure a longer-term agreement. For now, the US has maintained a 30 percent tariff on all Chinese goods while Beijing has a 10 percent levy on US products.

In the weeks since the temporary reprieve, however, Washington and Beijing appear to have had only limited discussions.

On Thursday, US Treasury secretary Scott Bessent told Fox News that trade talks between the US and China are “a bit stalled”, and may need to be reinvigorated by a call between US President Donald Trump and Chinese leader Xi Jinping.

In the meantime, the Trump administration has announced new, strict visa controls on Chinese university students and told US companies to stop selling their advanced chip software used to design semiconductors to Chinese groups.

Why is the US targeting Chinese students?

On Wednesday, Rubio announced that the US will “aggressively revoke” the visas of Chinese students studying in the country. He also pledged to ramp up scrutiny of new visa applicants from China and Hong Kong.

The Trump administration’s decision to carry out deportations and to revoke student visas is part of wide-ranging efforts to fulfil its hardline immigration agenda.

China is the second-largest country of origin for international students in the US, behind India. Chinese students made up roughly a quarter of all foreign students in the US during the 2023-2024 academic year – more than 270,000 in total.

China’s Ministry of Foreign Affairs criticised the decision to revoke visas, saying it “damaged” the rights of Chinese students. “The US has unreasonably cancelled Chinese students’ visas under the pretext of ideology and national rights,” Foreign Ministry spokesperson Mao Ning said.

The Trump administration also banned Harvard University from enrolling any foreign students on May 22, accusing the institution of “coordinating with the Chinese Communist Party”. That move has since been blocked by a US federal judge.

Still, the largest portion of foreign students at Harvard – almost 1,300 – are Chinese, and many top officials, including the current leader Xi Jinping, have sent their children to the Ivy League school.

How is the US taking aim at Chinese semiconductors?

On May 13, just after the end of trade talks in Geneva, the US Commerce Department issued guidance warning American firms against using Huawei’s Ascend AI semiconductor chips, stating that they “were likely developed or produced in violation of US export controls”. 

The move marked the latest in a series of efforts by the Trump administration to stymie China’s ability to develop cutting-edge AI chips. The tiny semiconductors, which power AI systems, have long been a source of tension between the US and China.

China’s Commerce Ministry spokesperson fired back against the guidance last week, accusing Washington of “undermining” the consensus reached in Geneva and describing the measures as “typical unilateral bullying and protectionism”.

Then, on May 28, the US government ramped up the row by ordering US companies which make software used to design semiconductors to stop selling their goods and services to Chinese groups, The Financial Times reported.

Design automation software makers, including Cadence, Synopsys and Siemens EDA, were told via letters from the US Commerce Department to stop supplying their technology to China.

Why is the US targeting Chinese semiconductors?

The US has been tightening its export controls on semiconductors for more than a decade, contending that China has used US computer chips to improve military hardware and software.

Chinese officials and industry executives deny this and contend that the US is trying to limit China’s economic and technological development.

In his first term as president, Trump banned China’s Huawei from using advanced US circuit boards.

Huawei is seen as a competitor to Nvidia, the US semiconductor giant which produces its own-brand of “Ascend” AI chips. In April, Washington restricted the export of Nvidia’s AI chips to China.

But Nvidia’s chief executive, Jensen Huang, recently warned that attempts to hamstring China’s AI technology through export controls had largely failed.

How could China be affected by US measures?

The suspension of semiconductor sales will limit supplies for aerospace equipment needed for China’s commercial aircraft, the C919, a signature project in China’s push towards economic and transport self-reliance.

Christopher Johnson, a former CIA China analyst, told The Financial Times that this week’s new export controls underscored the “innate fragility of the tariff truce reached in Geneva”.

“With both sides wanting to retain and continue demonstrating the potency of their respective chokehold capabilities, the risk the ceasefire could unravel even within the 90-day pause is omnipresent,” he added.

Will China ease restrictions on rare earth minerals exports?

US officials had expected the Geneva talks to result in China easing its export restrictions on rare earth elements. So far, there have been few signs of that, however.

Rare earth minerals are a group of precious minerals required to manufacture a wide range of goods in the defence, healthcare and technology sectors.

Rare earth metals, which include scandium and yttrium, are also key for producing components in capacitors – electrical parts which help power AI servers and smartphones.

China processes some 90 percent of the world’s rare earth minerals and instituted export controls in April to counter Trump’s “Liberation Day” tariffs in April, triggering alarm among US companies.

Last week, for instance, Ford temporarily closed a factory in Chicago which makes utility vehicles after one of its suppliers ran out of a specialised rare earth magnet.

In most new cars, especially elevate vehicles (cars with robotic technology allowing them to “climb” over obstacles), these high-tech magnets are used in parts which operate brake and steering systems, and power seats and fuel injectors.

The restrictions on the supply of rare earth minerals provide Beijing with a strategic advantage in future negotiations, as it can limit supplies of crucial technologies for US industry.

President Trump’s tariff strategy has been thrown into turmoil after a U.S. court issued a rare rebuke blocking many of the import taxes he has threatened and imposed on other countries.

In a ruling issued late Wednesday, a three-judge panel for the U.S. Court of International Trade declared that the Trump administration had wrongly invoked a 1977 law in imposing his “Liberation Day” tariffs on dozens of countries and they were therefore illegal. It also extended that ruling to previous tariffs levied on Canada, Mexico and China over the security of the U.S. border and trafficking in fentanyl.

The Trump administration immediately said it would appeal, putting the fate of the tariffs in the hands of an appellate court and potentially the Supreme Court. The ruling doesn’t affect Trump’s first-term levies on many imports from China or sectoral duties planned or already imposed on goods including steel, which are based on a different legal foundation that the Trump administration may now be forced to make more use of to pursue its tariff campaign.

It’s unclear just how fast Wednesday’s ruling will go into effect, with the court giving the government up to 10 days to carry out the necessary administrative moves to remove the tariffs. But if the decision holds, it would in a matter of days eliminate new 30% U.S. tariffs on imports from China, 25% tariffs on goods from Canada and Mexico and 10% duties on most other goods entering the U.S.

Those tariffs and the prospect of retaliatory ones have been seen as a significant drag on U.S. and global growth and eliminating them — even temporarily — would improve prospects for the world’s major economies.

There is uncertainty over whether the ruling represents a permanent setback to Trump’s push to reshape global trade or a mere impediment. Trump and his supporters have attacked judges as biased and his administration has been accused of failing to fully comply with other court orders, raising questions over whether it will do so this time.

A White House spokesperson dismissed the ruling as one made by “unelected judges” who should not have the power “to decide how to properly address a national emergency.” Trump has invoked national emergencies ranging from the U.S. trade deficit to overdose deaths to justify many of his tariffs.

“Foreign countries’ nonreciprocal treatment of the Unites States has fueled America’s historic and persistent trade deficits,” White House spokesman Kush Desai said in a statement. “These deficits have created a national emergency that has decimated American communities, left our workers behind, and weakened our defense industrial base — facts that the court did not dispute.”

If the ruling isn’t reversed or ignored, one of the consequences could be greater fiscal concerns at a time when bond markets are questioning the trajectory of the U.S.’s mounting debt load. The Trump administration has been citing increased tariff revenues as a way to offset tax cuts in his “one big, beautiful bill” now before Congress, which is estimated to cost $3.8 trillion over the next decade.

U.S. importers paid a record $16.5 billion in tariffs in April and Trump’s aides have said they expected that to rise in the coming months.

Major trading partners including China, the European Union, India, and Japan that are in negotiations with the Trump’s administration must now decide whether to press ahead in efforts to secure deals or slow walk talks on the bet they now have a stronger hand.

Deal doubts

Also thrown into doubt would be the outlines for a trade deal that Trump reached with the UK earlier in May. That potential pact calls for the imposition of a 10% U.S. tariff on all imports from the UK that would be null and void if Wednesday’s decision endures.

“I don’t know why any country would want to engage in negotiations to get out of tariffs that have now been declared illegal,” said Jennifer Hillman, a Georgetown Law School professor and former WTO judge and general counsel for the U.S. Trade Representative. “It’s a very definitive decision that the reciprocal worldwide tariffs are simply illegal.”

Hillman and other legal experts pointed out that Trump has other legal authorities he can draw on. But none would give him as broad powers as those he invoked under the International Emergency Economic Powers Act, or IEEPA.

A provision of the 1974 trade act gives presidents the power to impose tariffs of up to 15% for up to 150 days, though only in the event a balance of payments crisis, which Trump may not want to declare given the current nervous state of bond markets, Hillman said.

Trump could also invoke other authorities to impose tariffs on individual sectors or countries, as he did in his first term. In recent months, he has already used national security powers to impose duties on imported steel, aluminum and cars and launched seven other investigations pertaining to things like pharmaceuticals, lumber and critical minerals.

“The Trump administration’s toolbox won’t be completely empty,” Dmitry Grozoubinski, director of ExplainTrade and author of the book “Why Politicians Lie About Trade” said in an interview on Bloomberg Television. But as for IEEPA, “if they comply with this ruling that takes that toy out of the toy box.”

More uncertainty

Wednesday’s ruling came in two parallel cases brought by a conservative group on behalf of a small business and U.S. states controlled by Democrats.

“This ruling reaffirms that the President must act within the bounds of the law, and it protects American businesses and consumers from the destabilizing effects of volatile, unilaterally imposed tariffs,” said Jeffrey Schwab, senior counsel for the conservative Liberty Justice Center, which brought one of the cases.

For many other businesses, it brought the prospect of yet another sharp turn in U.S. tariff policies and more short-term questions and headaches.

Southern California-based Freight Right Global Logistics has several shipments on the water now for clients all over the U.S., carrying goods largely from China. Those containers are filled with everything from toys to robots, and it’s very uncertain what the tariff burden will be for those shipments when they land, said Freight Right Chief Executive Robert Khachatryan.

Khachatryan fielded questions Wednesday evening from his clients on potential refunds, which tariffs will be removed, and what would be the effective dates.

“We are working hard to answer customers questions but the reality is that there is not enough information out there yet,” he said. “Tomorrow we’re going to be all over the place figuring out what this means in practice.”

Donnan, Larson and Curtis write for Bloomberg News.

This latest twist in the Trump trade tariff drama has many people asking what it means for the UK’s deal with the US.

The answer is actually not as much as you might think.

For a start, the tariffs that the US court has ruled illegal do not include those on cars, which make up the bulk of what the UK exports to the US, and steel and aluminium, which are the other UK industries most affected.

UK exports of cars are currently attracting 27.5% tariffs while steel and aluminium are hit with 25% tariffs – the same as every other country. Wednesday’s ruling has not changed that.

And although the UK has done a deal with the US to reduce car tariffs to 10% and steel and aluminium tariffs to zero, that deal is yet to come into force.

Sources at Jaguar Land Rover told the BBC that these tariffs were costing them “a huge amount of money” and pushed back on the notion floated by the car industry trade body, the SMMT, that they could run down current US inventories before feeling the pain of the tariffs.

The government said it was working to implement the deal as quickly as possible and that Trade Secretary Jonathan Reynolds would press the case for speedy implementation when he meets US representatives at a meeting of the Organisation for Economic Co-operation and Development think-tank in Paris next week.

The ruling does block Trump’s imposition of blanket tariffs of 10% on other UK goods entering the US – such as products like salmon and whisky. So how that part of the tariff deal will pan out remains uncertain.

British exporters’ sigh of relief at tariffs being stopped could be short-lived as the White House has said it intends to appeal the decision.

There are also other mechanisms for the President to impose tariffs – through different provisions in trade acts or pushing them through congress.

The UK announced its trade deal with the US to some fanfare, but there are question marks as to how much better off the UK will be than other countries if it turns out that the President is prevented from imposing swingeing tariffs on others by either the courts or his own legislature.

Perhaps the most corrosive effect of all is yet another wild card being thrown into an already unpredictable game of international trade stand-off.

It makes it hard for businesses to plan, to invest, with any confidence.

FRANKFURT, Germany — Top officials at the European Union’s executive commission say they’re pushing hard for a trade deal with the Trump administration to avoid a 50% tariff on imported goods. Trump had threatened to impose the tariffs on June 1, but has pushed back the deadline to July 9, repeating an oft-used tactic in his trade war.

European negotiators are contending with Trump’s ever-changing and unpredictable tariff threats, but “still, they have to come up with something to hopefully pacify him,” said Bruce Stokes, visiting senior fellow at the German Marshall Fund of the United States.

Stokes also sees more at play than just a disagreement over trade deficits. Trump’s threats “are rooted in frustration with the EU that has little to do with trade,’’ Stokes said. “He doesn’t like the EU. He doesn’t like Germany.”

What exactly does Trump want? What can Europe offer? Here are the key areas where the two sides are squaring off.

Buy our stuff

Over and over, Trump has bemoaned the fact that Europe sells more things to Americans than it buys from Americans. The difference, or the trade deficit in goods, last year was 157 billion euros ($178 billion). But Europe says that when it comes to services — particularly digital services like online advertising and cloud computing — the U.S. sells more than it buys and that lowers the overall trade deficit to 48 billion euros, which is only about 3% of total trade. The European Commission says that means trade is “balanced.”

One way to shift the trade in goods would be for Europe to buy more liquefied natural gas by ship from the U.S. To do so, the EU could cut off the remaining imports of Russian pipeline gas and LNG. The commission is preparing legislation to force an end to those purchases — last year, some 19% of imports — by the end of 2027.

That would push European private companies to look for other sources of gas such as the U.S. However the shift away from Russia is already in motion and that “has obviously not been enough to satisfy,” said Laurent Ruseckas, a natural gas markets expert at S&P Global Commodities Insights Research.

The commission doesn’t buy gas itself but can use “moral suasion” to convince companies to turn to U.S. suppliers in coming years but “this is no silver bullet and nothing that can yield immediate results,” said Simone Tagliapietra, an energy analyst at the Bruegel think tank in Brussels.

Europe could buy more from U.S. defense contractors as part of its effort to deter further aggression from Russia after the invasion of Ukraine, says Carsten Brzeski, global chief of macro at ING bank. If European countries did increase their overall defense spending — another of Trump’s demands — their voters are likely to insist that the purchases go to defense contractors in Europe, not America, said Stokes of the German Marshall Fund. One way around that political obstacle would be for U.S. defense companies to build factories in Europe, but “that would take time,’’ he said.

The EU could also reduce its 10% tax on foreign cars— one of Trump’s long-standing grievances against Europe. “The United States is not going to export that many cars to Europe anyway … The Germans would be most resistant, but I don’t think they’re terribly worried about competition from America,’’ said Edward Alden, senior fellow at the Council on Foreign Relations. ”That would be a symbolic victory for the president.’’

A beef over beef

The U.S. has long complained about European regulations on food and agricultural products that keep out hormone-raised beef and chickens washed with chlorine. But experts aren’t expecting EU trade negotiators to offer any concessions at the bargaining table.

“The EU is unwilling to capitulate,” said Mary Lovely, senior fellow at the Peterson Institute for International Economics. “The EU has repeatedly said it will not change its sanitary rules, its rules on (genetically modified) crops, its rules on chlorinated chickens, things that have been longtime irritants for the U.S.’’

Backing down on those issues, she said, would mean that “the U.S. gets to set food safety (standards) for Europe.’’

Value-added tax

One of Trump’s pet peeves has been the value-added taxes used by European governments, a tax he says is a burden on U.S. companies.

Economists say this kind of tax, used by some 170 countries, is trade-neutral because it applies equally to imports and exports. A value-added tax, or VAT, is paid by the end purchaser at the cash register but differs from sales taxes in that it is calculated at each stage of the production process. In both cases, VAT and sales tax, imports and exports get the same treatment. The U.S. is an outlier in that it doesn’t use VAT.

There’s little chance countries will change their tax systems for Trump and the EU has ruled it out.

Negotiating strategy

Trump’s approach to negotiations has involved threats of astronomical tariffs – up to 145% in the case of China – before striking a deal for far lower levels. In any case, however, the White House has taken the stance that it won’t go below a 10% baseline. The threat of 50% for the EU is so high it means “an effective trade embargo,” said Brzeski, since it would impose costs that would make it unprofitable to import goods or mean charging consumers prices so high the goods would be uncompetitive.

Because the knottiest issues dividing the EU and U.S. — food safety standards, the VAT, regulation of tech companies — are so difficult “it is impossible to imagine them being resolved by the deadline,’’ Alden said. ”Possibly what you could have — and Trump has shown he is willing to do this — is a very small deal’’ like the one he announced May 8 with the United Kingdom.

Economists Oliver Rakau and Nicola Nobile of Oxford Economics wrote in a commentary Monday that if imposed, the 50% tariffs would reduce the collective economy of the 20 countries that use the euro currency by up to 1% next year and slash business investment by more than 6%.

The EU has offered the US a “zero for zero” outcome in which tariffs would be removed on both sides industrial goods including autos. Trump has dismissed that but EU officials have said it’s still on the table.

Lovely of the Peterson Institute sees the threats and bluster as Trump’s way of negotiating. “In the short run, I don’t think 50% is going to be our reality.’’

But she says Trump’s strategy adds to the uncertainty around U.S. policy that is paralyzing business. “It suggests that the U.S. is an unreliable trading partner, that it operates on whim and not on rule of law,’’ Lovely said. “Friend or foe, you’re not going to be treated well by this administration.’’

McHugh and Wiseman write for the Associated Press. Wiseman contributed to this report from Washington.