#USChinaTradeTalks 🇺🇸 & 🇨🇳

1. London Meeting: Top officials from both nations, including U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, held talks in London to address disputes over a preliminary agreement struck in Geneva last month. The discussions aimed to ease tensions amid China’s economic challenges and U.S. trade policy impacts.

2. Economic Context: China’s May exports slumped 34.5% year-on-year to the U.S., the sharpest drop since February 2020, as tariffs bit deeper. Factory-gate deflation also worsened, adding pressure on Beijing.

3. Market Reactions: The dollar dipped 0.2% against the yen, while Treasury yields fell slightly (10-year yield down 2.6 bps) as traders awaited outcomes. The euro and sterling gained modestly.

4. Focus on Inflation: U.S. May CPI data (due June 11) will be scrutinized for tariff impacts, with the Fed signaling caution on rate cuts until trends clarify.

5. Next Steps: Japan’s trade negotiator plans Washington talks later this week, highlighting broader regional trade dynamics.