And the Pentagon has launched a review of the Aukus deal.
Happy Thursday and welcome to your early morning wrap of the key business and political headlines from around the world.
First up, a trade deal between the United States and China is “done”, according to US President Donald Trump.
Reuters reports that negotiators from both sides have agreed on a framework to get a fragile trade truce back on track and remove Chinese export restrictions on rare earth minerals and other critical industry components.
Trump took to social media to confirm the deal, which is subject to final approval from him and President Xi Jinping.
"Full magnets, and any necessary rare earths, will be supplied, up front, by China,” he said on his social media platform Truth Social. “Likewise, we will provide to China what was agreed to, including Chinese students using our colleges and universities (which has always been good with me!). We are getting a total of 55% tariffs, China is getting 10%."
A White House official said the 55% represents the sum of the 10% baseline “reciprocal” tariff Trump has imposed on most of its trading partners; 20% on all Chinese imports that followed Trump’s accusation the country, along with Mexico and Canada, facilitates the flow of fentanyl to the US; and the pre-existing 25% levies on Chinese imports Trump imposed during his first time in the White House.
Meanwhile, Wall Street’s main indices were down overnight despite the preliminary trade truce and softer-than-expected inflation data.
The main indices were between 0.15% and 0.6% lower. The decline comes after a week of consistent gains, with the S&P 500 rising in six of the last seven days.
“Inflation in May was lower than anticipated, suggesting the tariffs aren’t having a large immediate impact because companies have been using existing inventories or slowly adjusting prices due to uncertain demand,” Goldman Sachs Asset Management global co-chief investment officer of multi-asset solutions Alexandra Wilson-Elizondo told CNBC.
Donald Trump.
In other global news, signs are emerging that the worst of the feud between Elon Musk and Donald Trump is over.
According to the BBC, Musk posted on his social media platform X overnight that he regretted some of the posts he made about the president. “They went too far.”
The two were caught in a war of words last week after the Tesla owner stepped back from his White House role and called Trump’s tax bill a “disgusting abomination”. He also made comments claiming that Trump appears in unreleased government files relating to the late sex offender Jeffrey Epstein.
In response, Trump said Musk had “lost his mind” and threatened to cancel his government contracts, which are worth billions.
But overnight Trump told the New York Post he was open to reconciliation and there were no “hard feelings”.
Elon Musk.
To Gaza, where Al Jazeera reports that the Palestinian death toll has eclipsed 55,000 since the Hamas-led attack in late 2023 killed 1,195 Israelis and foreign nationals.
At least 120 Palestinians have been killed and 474 injured in Israeli attacks across Gaza in the past 24 hours, according to the enclave’s health ministry.
Closer to home, The Australian is reporting that the Pentagon has launched a review into the Aukus partnership to ensure the agreement is aligned with Donald Trump’s “America First” agenda.
In a statement to the newspaper, the Pentagon confirmed the review, noting that it was an initiative launched by the previous administration.
Under the Aukus arrangement, the US has agreed to provide Australia with between three and five nuclear-powered submarines. But concerns have emerged over whether the US industrial base can meet the target of producing the required 2.33 Virginia-class submarines per year – the rate needed to replace the boats sold to Australia.
Australia made the first $500m down payment to the US under the deal in February.
The Virginia-class fast-attack submarine USS Minnesota arrives at HMAS Stirling, Western Australia in early 2025. (Source: Wikimedia Commons.)
Finally, Brian Wilson, the frontman and co-founder of The Beach Boys, has died at the age of 82, according to the BBC.
"We are heartbroken to announce that our beloved father Brian Wilson has passed away," his family said in a statement shared online. "We are at a loss for words right now.”
Born in 1942 and raised in Hawthorne, California, Wilson formed a group along with his younger brothers Carl and Dennis, cousin Mike Love and friend Al Jardine. They went on to become one of the country's biggest rock bands, The Beach Boys.
Music magazine Rolling Stone ranked them at 12 on the list of the “100 Greatest Artists of All Time”.
