U.S.-China Trade Talks Wrap Inconclusively

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Top of the Agenda

U.S.-China talks on extending the countries’ tariff pause were constructive but inconclusive, U.S. Treasury Secretary Scott Bessent said as they wrapped yesterday. While China’s trade negotiator said the countries agreed to extend their truce, Bessent said that statement “jumped the gun.” U.S. President Donald Trump is due to be briefed today about the talks; this morning he announced a 25 percent tariff on Indian goods via social media. Washington’s partial retreat from higher tariff rates led the International Monetary Fund (IMF) to raise its global growth forecast yesterday.

China-U.S. trade details.

• Both countries are currently in a ninety-day tariff pause set to expire August 12. Washington had increased tariffs to 145 percent earlier this year, and Beijing responded by hiking them to 125 percent. 
• The option for another ninety-day pause is on the table, Bessent said.
• As the Trump administration also considers a more comprehensive trade deal with China, it has relaxed some chip export controls to the country. A White House spokesperson told the Washington Post that Trump is focused on “leveling the playing field for American industries and getting China to stop the flow of fentanyl into our country.”

IMF forecasting. 

• The fund’s top economist warned that the world economy would “continue hurting” due to tariffs. He said that price increases due to U.S. duties would likely be passed to U.S. consumers in the second half of this year, leaning to inflation above the U.S. target level. 
• The IMF’s upgrade to its 2025 growth forecast—from 2.8 to 3 percent—also noted factors including a drop in the value of the dollar, which it said was cushioning the impact of Trump’s trade war. 
• That’s down from 3.3 percent global growth in 2024, and an average of 3.7 percent in the decade prior to the COVID-19 pandemic.

“The simple fact: We are worse off than we were before the trade war with China. They had never escalated to this level, and we had never folded before. And we could have escalated to reset the baseline, but we did not. We took the [loss] and called it a [win].”
—CFR expert Rush Doshi on X

Across the Globe

Diplomatic moves on Gaza. The UK will recognize Palestinian statehood by September’s UN General Assembly unless Israel takes “substantive steps” to reach a truce in Gaza and a two-state solution, Prime Minister Keir Starmer said yesterday. His announcement follows a similar one by French President Emmanuel Macron last week. Starmer also said Hamas should disarm and release all hostages. Adding to the diplomatic pressure on Israel, the foreign ministers of fifteen countries issued a joint statement that expressed “willingness or positive consideration” to recognize a Palestinian state and urged countries to normalize relations with Israel.

Trump’s ten-day limit. Trump said yesterday that he was giving Russian President Vladimir Putin ten days to reach a truce with Ukraine or risk further economic consequences. Despite the ultimatum, Russian strikes killed dozens in Ukraine overnight into Tuesday, including a pregnant woman at a hospital. While the Kremlin spokesperson said only that it “took note” of Trump’s threat, former Russian President Dmitry Medvedev called it a “step toward war.” 

Quake prompts tsunami waves. An 8.8 magnitude earthquake off Russia’s coast, one of the most powerful ever recorded, prompted tsunami warnings across the Pacific Ocean. They included alerts in Japan and Hawaii and as far away as Central and South America. Some two million people were affected by evacuation orders following the quake.  

India’s smartphone exports. India overtook China as the world’s largest supplier of smartphones to the United States in the second quarter of 2025, a research firm said. China was also surpassed by Vietnam, which came in second place. Apple has moved some of its production from China to India in recent years amid geopolitical tensions.

Green energy in Australia. The government announced plans to expand an investment program in large-scale solar, wind, and energy storage by 25 percent, or 8 gigawatts, by the end of the decade. The announcement comes amid falling prices for batteries and solar, the country’s climate change minister said; it also comes amid concerns Australia would miss a clean energy target.

Houthi hostages. The Philippine government said yesterday that nine Philippine seafarers were in Houthi rebel custody, after the rebels sank their Greek-operated ship earlier this month. On Monday, the Houthis released a video showing some of the men. Houthi officials did not immediately respond to a question about releasing them. In recent days the rebels pledged to target ships of companies with Israeli ties. The Houthis also fired a ballistic missile at Israel yesterday that Israel intercepted. 

U.S.-India space launch. The first joint satellite project between the two countries launched into space this morning from India’s southeastern coast. The radar satellite was jointly designed by NASA and India’s space agency. It is set to map almost all of Earth’s land and ice surfaces. The mission was over ten years in the making.

Ivory Coast succession. Alassane Ouattara, the three-term president of the Ivory Coast, said yesterday he will seek a fourth term. Multiple opposition candidates have been banned from running in the country’s October elections. While legislation imposes a two-term limit for presidents, the top judicial body in 2020 upheld Ouattara’s argument that his term count had been restarted by a new constitution in 2016.

What’s Next

• Today, the U.S. Federal Reserve is expected to announce its latest interest rate decision in Washington, D.C.

• Tomorrow, a mission to the International Space Station carrying a Japanese, Russian, and U.S. crew is due to launch from Florida.
• Tomorrow, South Korea’s Foreign Minister Cho Hyun holds talks with U.S. Secretary of State Marco Rubio in Washington, D.C.
• Tomorrow, a state of emergency in Myanmar is set to expire unless renewed.