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good morning. Today we begin with a 90-day ceasefire in the US-China trade war. And whether the global economy has accomplished it through Donald Trump’s worst tariffs. Also, in Firstft Asia:
Modi claims India’s victory after clash with Pakistan
New Taiwanese TV drama depicts Chinese invasion
How Xi triggered the China power revolution
US stocks surged yesterday and yesterday among investors that Washington and Beijing tariffs Detente meant that Trump’s trade war is beyond its most intense stage.
Investor Optimism: The US and China said yesterday they will cut tariffs for at least the next 90 days following talks in Geneva over the weekend. US tariffs will be reduced to 30% and China will be reduced to 10%. Wall Street stocks have skyrocketed in the news. The Blue-chip S&P 500 finished 3.3% higher, while the high-tech Nasdaq Composite closed 4.4%. The dollar rose 1.5% against a basket of six fellow members, bringing it back on track for the biggest daily rise since Trump’s election on November 5th.
What the analyst said: “Peak tariffs are very important in the past. We’re growing this year, but that’s not like a recession,” said Ajayi Rajadhyakusha, global chair of Barclays’ research. “The market defaults what we assume is currently in a 10-30 world. It’s 10% (customer tax) in most of the world, and 30% in China,” says Rajadhi Yaksha, who doesn’t think there will be a major change in policy after 90 days.
However, Priya Misra, bond portfolio manager at JPMorgan Asset Management, said “uncertainty is still on us.” She added: “Companies still have to think about supply chains, investments, employment… There have been some damages. The dust has not settled completely.”
Who blinked first? A secret conference held almost three weeks ago in the basement of IMF headquarters paves the way for the US, and the ceasefire of China’s trade war agreed in Geneva. Despite both sides warning, they were willing to dig for a long time, but the ceasefire proved to be easier and faster than expected. One overridden question has a great deal of implications for future negotiations.
FT View: The three-month dente in the US-China trade war is undoubtedly a bailout for the global economy, but the uncertainty about Trump’s trade war has not faded.
Opinion: Customs are bets on the free market. That means it can deliver better results than the global market dominated by national champions, a nation-controlled national champion – writes Oren Cass.
For a detailed analysis, if you are a premium subscriber, sign up for Alan Beattie’s Stream Secrets Newsletter or upgrade your subscription. Here is the other thing we keep tabs today:
Economic Data: India and the US are issuing CPI inflation rates for April.
Automakers: Honda, Nissan and Tata Motors report year-round results.
China-Latin America Bonds: Beijing holds a ministerial forum with Latin American and Caribbean communities where Xi Jinping will give an opening speech.
Trump visits the Gulf Coast. The US president is scheduled to arrive in Saudi Arabia today for his first official foreign tour since returning to the White House, hoping to secure a multi-billion dollar deal.
Donald Trump’s return to the White House has sparked a surge in tension with China, bringing major questions to global businesses, markets and other worlds. Join us on May 28th for insights into the most consequential geopolitical competition of our time. Sign up now and ask the panel questions.
Five more top stories
1. Indian Prime Minister Narendra Modi said his country has proven military “dominance” in clashes with Pakistan, which brought nuclear-armed neighbors to the brink of war. At the televised address of yesterday’s victory, Modi also warned that New Delhi had “drawn a new line” for Islamabad, and that it had only “stop” military operations.
2. CATL, the world’s largest producer of electric vehicles and energy storage systems batteries, said it would raise at least $4 billion from Hong Kong’s biggest stock sales and what’s set on the biggest list of the year. The stock will begin trading on May 20, according to a prospectus filed with the Hong Kong Stock Exchange yesterday.
3. The Kurdistan Workers’ Party (PKK) yesterday said it would end the “armed struggle” with the Turkish state and dissolve it. Designated as a terrorist group by Türkiye and its western allies, the PKK has been in conflict with the Turkish state for more than 40 years. Historic moves have major political and security implications on the region.
4. Perplexity, an artificial intelligence search engine, has completed a funding round that cherishes a $14 billion startup, a $5 billion jump from its valuation it secured six months ago. The $500 million round, led by venture capital firm Accel, is aimed at breaking Google’s two-year advantage in search markets.
5. Trump defended the US plan to accept a $400 million jumbo jet from Qatar “free” after Democrats criticised the move as “corruption in normal vision.” The president called Qatar’s offer a “great gesture” and complained about how long it would take to replace US Air Force 1.
Detailed news
In the upcoming scenes of Taiwanese TV drama Zero Day, the TV anchor reads the news without flashing. China has imposed a lockdown on Taiwan and appears to be poised for an attack. As the broadcast moves to the Ministry of Defense, she turns incredibly towards her producer and asks, “Is there really a war going to happen?” The controversial series – the first of Mass Entertainment to realistically portray Chinese invasion – aims to influence the real world by forcing the same questions to the nation’s citizens.
I’m reading and watching it again. . .
Tehran’s Cafe Culture: Young Iranians embrace other parts of the world, and Najme Bozorghma is one pastry at a time.
Trump’s “America First” Policy: As proven last week’s India-Pakistan clash, when you run a superpower, you can’t just ignore the outside world.
Interview: Trump’s ally Steve Bannon told the FTWeekend Festival that the US president will “serve a third term” with the help of a constitutional “workaround.”
The chart of the day
China is moving forward to become the world’s first “electrostatic material,” with its share of energy being born from electricity and is increasingly driven by technology that has a clean economy. Today’s big reading explores what it means for global trade, the Chinese economy, and geopolitical tensions with the United States.
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Take a break from the news
FT has tested top apps such as Openai, Anthropic, Google, and other, wrote emails, booked trips, and used requests to summarise news. See how major AI agents compared them in everyday work tasks.
