TL;DR

US–China rare-earth deal signed; India trade talks near deadline; AI infrastructure push accelerates.

Highlights

• US and China sign a rare-earth trade deal, easing select export curbs but leaving 30% average US tariffs and 20% fentanyl-related surcharges in place13.
• US signals trade negotiations with India are near completion; a deal could avert a 26% US tariff snapback on Indian goods by July 94.
• Chinese industrial profits fell 9.1% YoY in May, the steepest decline in seven months, amid tariff pressures and weak demand7.
• US Treasury Secretary Bessent urges Congress to remove Section 899 retaliatory tax after a G7 deal exempts US multinationals from the OECD’s global minimum tax, complicating budget talks5.
• Trump administration drafts executive orders to accelerate US power grid and data center build-out for AI, with a formal plan expected July 2311.
• SoftBank increases its OpenAI investment to $32B, highlighting ongoing capital flows into US AI and tech12.
• Nikkei 225 rallies above 40,000 on chip sector strength and easing tariff concerns14; Renesas delays $20B sales goal to 2035 due to chip market weakness20.
• US auto tariffs reduce UK vehicle exports to the US by 55% YoY in May and trigger parts-supplier layoffs6.
• US–Israel airstrikes claim to have disabled Iran’s nuclear program8; Israel strikes Hezbollah in Lebanon9; shipping in the Strait of Hormuz faces elevated security risks10.
• Mexico’s CNBV intervenes in Vector Casa de Bolsa after US money-laundering allegations tied to the Sinaloa cartel19.
• Eurozone: France and Spain see firmer inflation17, but confidence remains weak; Germany’s minimum wage set to rise, raising cost concerns for small businesses18.
• Bhutan’s Bitcoin reserves reach $1.3B (40% of GDP), underscoring sovereign crypto adoption15.

Commentary

US–China trade tensions show only modest easing as the rare-earths deal restarts critical mineral flows but leaves most tariffs and surcharges intact13. While this is a positive for US manufacturers dependent on rare earths, the broader tariff regime continues to weigh on global supply chains and Chinese industrial profits, which posted their sharpest drop in months7. The US is also pushing for a trade agreement with India to avoid a tariff snapback by July 9, which could benefit select US exporters and importers if finalized in time4.

AI and tech remain in focus. The White House’s planned executive orders to accelerate grid and data center expansion address infrastructure bottlenecks for the AI sector, potentially supporting US utilities such as The Southern Company , Xcel Energy, Inc. , Duke Energy Corporation , and Entergy Corporation , as well as data center REITs and chipmakers11. SoftBank’s expanded $32B commitment to OpenAI signals continued global capital inflows into US tech12, even as the chip sector shows mixed signals: the Nikkei’s rally14 contrasts with Renesas’ profit warning and delayed growth targets20, reflecting ongoing inventory corrections outside the US.

Geopolitical risks persist. US–Israel strikes on Iran’s nuclear facilities8 and renewed Israeli action in Lebanon9 keep energy and shipping markets alert, especially with shipping in the Strait of Hormuz taking extra precautions10. Any escalation could impact oil prices and logistics costs. Meanwhile, US auto tariffs continue to disrupt transatlantic supply chains, with UK vehicle exports to the US sharply lower and US parts suppliers such as Genuine Parts Company , ADVANCE AUTO PARTS INC , and LKQ Corporation facing layoffs6.

On the policy front, the removal of the Section 899 retaliatory tax after the G7 tax deal removes a potential friction point for US multinationals but complicates budget negotiations, possibly affecting Treasury issuance and the dollar5. In Europe, rising inflation in France and Spain17 is offset by weak confidence and pending wage hikes in Germany, which could impact US firms with European exposure18. Mexico’s regulatory intervention in a major brokerage over US money-laundering allegations is a reminder of ongoing compliance risks in cross-border finance19.